Gloves and protective clothing maker Ansell’s full-year net profit has dropped 7.2% to $US147.7 million ($A186.8 million), for the year to June 30 as the company prepares for life without its long held sexual wellness business.
And it expects to boost earnings by up to 22% this financial year – so look for it to spend some of the $US600 million it was paid by Chinese buyers of the wellness business in May.
But it seems the company already has a good idea how the money will be spent.
Ansell says it is considering options on how to redeploy sales proceeds from that $US600 million divestment of its condoms business. It anticipates the sale, which is expected to generate a net gain of $US365 million, will be completed by the end of September. "Acquisition opportunities remain a focus for enhanced growth if they can meet our demanding strategic and financial criteria," Ansell said in a statement on Monday.
"We also see the opportunity to increase investment in our existing business as outlined in the transformation program." Ansell also expects to redeploy some of the sale proceeds to its current $US265 million share buyback.
Playing it safe the company barely lifted final dividend – from 23.5 cents US a share to 23.75. The full year payout is up to 44 cents, an increase of just 1.1%.
Revenue for the 12 months to June 30 was 1.7% higher at $US1.60 billion, which included $US225 million from the sexual wellness division that it sold to a Chinese consortium in May.
Chief executive Magnus Nicolin highlighted 3.6% “organic revenue growth” which he said was " at the upper end of our targeted range and we finished the year with strong momentum".
The company said earnings per share from continuing business for the 2018 financial year is expected to be US91¢ to US101¢, excluding, but by between 10% and 22%.
The shares fell more than 2% to around $21. Investors wants a bit more ‘spice’ from the result, such as specifics on where the money will be spent. the existing buyback has already been factored in.
