The Ansell Limited (ASX: ANN) share price will be in focus on Tuesday after the safety products company released its full year results for FY 2020.
How did Ansell perform in FY 2020?
For the 12 months ended 30 June 2020, Ansell posted a 7.7% increase in sales to US$1,613.7 million.
This was driven largely by the performance of its Healthcare business, which reported a 12.5% increase in revenue to US$894.6 million thanks to COVID-19 related demand for exam/single use products. This was supported by a modest 2.2% increase in Industrial revenue to US$719.1 million. Strong demand for gloves for cleaning and sanitation drove the segment’s growth.
Ansell’s earnings before interest and tax (EBIT) margin expanded by 135 basis points during FY 2020 thanks to a combination of transformation benefits and net favourable raw material costs.
Combined with its solid sales growth, this led to the company reporting a 23% increase in EBIT to US$141.8 million. It’s worth noting that on a constant currency basis, its EBIT was up 34.7% year on year.
Net profit after tax came in at US$158.7 million, up 5.2% year on year or 19% in constant currency. Whereas earnings per share was up 9.2% or 23.6% in constant currency to 121.8 U.S. cents.
The company’s operating cash flow generation was strong at US$191.7 million, leading to cash conversion of 117.7%. This allowed the Ansell board to increase its full year dividend to 50 U.S. cents, up 7% on FY 2019’s dividend. This comprises an interim dividend of 21.75 U.S. cents per share and a final dividend of 28.25 U.S. cents per share.
An unprecedented year.
Ansell’s Chairman, John Bevan, was pleased with the company’s performance in a tough economic environment.
He commented: “F’20 was an unprecedented year for the global economy but also for the Company. Despite operational challenges caused by COVID-19, Ansell was able to deliver a high quality financial result with strong growth in sales and earnings combined with robust cash flow generation and improved return on capital employed.”
“The Company has delivered EPS at the top end of its guidance range. This demonstrates not only the successful execution of the company’s strategy but also resilience of the business, reflecting the breadth of its portfolio and the balance of products, end users and geographies,” he added.
FY 2021 outlook.
Management is cautiously optimistic on the year ahead.
It explained: “The impact of COVID-19 on the global economy and the markets in which Ansell operates continues to evolve. Although we cannot predict the severity of COVID-19 around the world, we do expect it to remain a challenge through F’21 and possibly into F’22 as well. We believe the Company is well positioned to continue to respond and adapt. We have a well-balanced portfolio with strong brands that served us well in F’20 and are expected to do so in the future.”
Management is forecasting earnings per share in the range of 126 U.S. cents to 138 U.S. cents in FY 2021. This represents 3.5% to 13.3% year on year growth.
It commented: “The Company acknowledges that the COVID-19 situation is constantly evolving and presents significant uncertainty. The EPS range reflects the uncertainties from raw material pricing, foreign exchange, the ability to increase Exam/Single Use prices as needed and finally our ability to increase supply of critically needed products.”
These 3 stocks could be the next big movers in 2020
When investing expert Scott Phillips has a stock tip, it can pay to listen. After all, the flagship Motley Fool Share Advisor newsletter he has run for more than eight years has provided thousands of paying members with stock picks that have doubled, tripled or even more.*
In this FREE STOCK REPORT, Scott just revealed what he believes are the 3 ASX stocks for the post COVID world that investors should buy right now while they still can. These stocks are trading at dirt-cheap prices and Scott thinks these could really go gangbusters as we move into ‘the new normal’.
Find out the names of our 3 Post COVID Stocks – For FREE!
*Returns as of 6/8/2020
More reading
- 5 things to watch on the ASX 200 on Tuesday
- 2 quality ASX shares to buy with $2,000
- Why Kogan and these ASX shares just hit new record highs
- The ASX stocks that could enjoy a consensus earnings upgrade this reporting season
- Leading brokers name 3 ASX shares to buy today
Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia has recommended Ansell Ltd. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.
The post Ansell share price on watch after COVID demand drives strong FY 2020 growth appeared first on Motley Fool Australia.
from Motley Fool Australia https://ift.tt/3hq3NDr
Leave a Reply