Protective wear group, Ansell (ASX:ANN) saw a dip in sales, a near 50 per cent slump in earnings and its profit dropped by nearly half and shareholders will share in some of the pain, as will more than 1300 staff members who will lose their jobs.
The global manufacturer of personal protective equipment reported a $US76.5 million ($A113.7 million) net profit for the 12 months to 30 June, down 48.4 per cent from 2022-23.
That slide was on a much smaller 2.2 per cent dip in sales for the year to $US1.62 billion ($A2.4 billion), which Ansell attributed in part to healthcare customers continuing to draw down on inventory built up during the COVID-19 pandemic.
Shareholders will see less in their bank accounts. Ansell will pay a final dividend of 21.90 US cents a share, taking total dividend for the full year to 38.40 US cents for the year, down 16.3 per cent from 2022-23.
CEO Neil Salmon said in the ASX statement that the company achieved its key performance objectives, with sales and earnings improving as healthcare end-market conditions normalised.
“We exit FY24 with good momentum and with post-pandemic market disruptions largely behind us we look forward to returning the business to organic growth in FY25,” Mr Salmon said.
But now the company is looking for a big boost from its expensive buy towards the end of the financial year.
It has to digest the acquisition of Kimberly-Clark Corporation’s PPE business (renamed KBU) for $US638.9 million completed at the start of the 2024-25 financial year, meaning a full 12 months contribution from the new business.
So in one respect the 2023-24 results do mark the end of the ups and downs from the impact of the pandemic and a new direction for Ansell with the new business on board.
In Tuesday’s statement Salmon was optimistic about the new business:
“The acquisition increases our presence in fast growing Scientific markets, including Life Sciences, where very specific customer requirements for products used in cleanroom manufacturing environments and laboratories creates room for meaningful differentiation.
“It also strengthens our business with its complementary geographic presence, leading Kimtech and KleenGuard brands and services including its industry leading RightCycle PPE recycling program.
“Our immediate focus is on effecting a clean integration of KBU in FY25 and beginning to realise the significant value achievable under Ansell ownership.”
But there is a downside to all this optimism which tells us more about the lack of it among the board and senior managers.
Ansell has cut 10 per cent or nearly 1400 staff in recent times and management thinks more will go.
Ansell says the cuts are because many of its 14 plants are increasing the level of automation.
