Personal protective equipment manufacturer Ansell will lift its dividend for the 17th year in a row thanks to the impact of COVID-19 on its expanding range of PPE products (especially gloves and protective suits).
Ansell told the ASX that sales for the year to June were up 7.7% to $US1.61 billion ($A2.25 billion) which was ahead of market forecasts of $US1.56 billion thanks to COVID-19 driven demand for more personal protective equipment.
The statutory net profit for the year rose 5.2% to $158.7 million. Earnings before interest and tax (EBIT) was up 8.3% at $US219.7 million.
The company declared a final dividend of 28.25 US cents a share for a full-year dividend of 50 cents. That’s up more than 7% on 2018-19.
The company, which has manufacturing operations around the world, is a leading maker of chemical bodysuits and rubber gloves, and naturally, demand has soared for these products since the coronavirus pandemic hit countries across the globe from January onwards and continues to have a huge impact on business, activity and the health of the populace.
It should also be pointed out that Ansell is an exception to ASX-listed companies in 2020 in that it didn’t cut guidance because of COVID-19.
In fact, in late March, it reaffirmed earlier guidance that is expected to deliver earnings per share growth in the range of US112 cents to US122 cents for 2019-20 ($US121.8 cents a share was the outcome).
In a briefing on Tuesday Ansell said it will spend $US100 million boosting production of personal protective equipment in 2020-21. CEO Magnus Nicolin told the briefing the company sees higher demand for its PPE as a long term trend because of COVID-19.
Ansell shares hit an all-time of $41.79 during trading yesterday and ended at $39.52, down 1.9% because of late profit-taking.
Ansell chairman John Bevan said the company had delivered a high-quality result with strong growth in sales and earnings despite the challenges caused by COVID-19.
“The company has delivered EPS at the top end of its guidance range. This demonstrates not only the successful execution of the company’s strategy but also resilience of the business, reflecting the breadth of its portfolio and the balance of products, end-users, and geographies.
“Our balance sheet remains strong with the liquidity of ~$US605m comprised of cash and committed undrawn bank facilities available at 30 June 2020,” he said.
“Given ongoing uncertainties in the market, we considered it was prudent to pause our share buyback program at the end of March 2020. Prior to this, we had purchased 3.8m shares at a cost of $67.9m during F’20,” he added.
The company said the uncertainty caused by the virus had seen two major changes to senior executives and board personnel delayed.
“Given the uncertainties introduced by COVID-19 as well as international travel restrictions, the Board has decided to postpone two critical changes to the Board and Management succession plans. Specifically (i) Marissa Peterson agreed to defer her retirement by one year until the F’21 Annual General Meeting; and (ii) Magnus Nicolin agreed to delay his retirement and stay with the company for a further six months, until 31 December 2021,“ Ansell said in the statement.
