Ansell (ASX:ANN) share price climbs after upbeat AGM update

The Ansell Limited (ASX: ANN) share price has climbed by 1.35% today to $42.08 at the time of writing. This movement comes off the back of its online annual general meeting (AGM) which took place this morning, where the company reported some impressive metrics for FY20 as well as FY21. 

Ansell Limited has a 125-year history of doing business, and is involved in the development, manufacturing, and sale of gloves and protective personal equipment in the industrial and medical end markets. Ansell operates in two main business segments: industrial and healthcare.

Major highlights from today’s AGM

Ansell reported a number of strong metrics today, including:

• a 7.6% increase in sales in FY20 to $1.61 billion.
• Its healthcare unit delivered 13.4% growth in sales in FY20, while its industrial unit delivered a 1.3% increase despite softening economy
• FY20 earnings before interest and tax (EBIT) grew by 39.7% to $219.7 million, which was supported by the sales growth, internal transformational initiatives, and net favourable raw material costs
• Earnings per share (EPS) increased by 23.6% on a constant currency basis.

The company also reported its costs have increased due to temporary plant shutdowns, other COVID-19 related costs, and adverse foreign exchange movements. Ansell attributes its net debt increase largely to changes in the new lease accounting standard.

Additionally, the company confirmed its dividend will be 50 cents per share, which represents a 7% increase.

What else was discussed

The company said that the COVID-19-associated increase in demand for its products started in China in February. This then expanded to the emerging markets customers in March, and was shortly followed by demand from North and Latin America. 

It also mentioned that the emerging markets revenue mainly from China and India was $338 million, or around 21% of total sales.

Guidance for FY21

The company also released guidance for FY21.

It says that Ansell’s strong portfolio of brands is well positioned to respond and adapt to impacts from COVID-19, which it expects to remain through all of FY21 and potentially into FY22.

Performance in the first four months of FY21 has been strong for the company, despite the continued uncertainties arising from COVID-19. Ansell is now expecting FY21 EPS to be in the range of $1.35 to $1.45 cents, which is up from previous guidance of $1.26 to $1.38.

Commenting on FY21 priorities, the company stated:

One of Ansell’s priorities is to ensure that it maintains its healthy balance sheet, and has sufficient capital to deploy for capital expenditure and dividends. Therefore, we paused buying back shares with the onset of COVID-19. However, we will keep the buy-back program open to maintain flexibility for our capital management strategies and we will continue to look to buy back shares opportunistically.

How has the Ansell share price fared in 2020?

The Ansell share price has had a stellar year so far, rising by around 45%. At today’s share price of $42.08, it has a market capitalisation of $5.4 billion.

More reading

• Leading brokers reiterate buy rating on this ASX healthcare share
• 6 major events for ASX shares this week
• Here’s why the Ansell (ASX:ANN) share price hit a record high today

Motley Fool contributor Eddy Sunarto 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.

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