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Ansell shares lift on FY20’s EPS growth forecast

Tom Richardson

The Ansell Limited (ASX: ANN) share price is up 6% today after it released its results for the financial year ending June 30, 2019. Below is a summary of the results with comparisons to the prior year. (All figures in US$).

  • Net profit of $111.7m, -19.5%
  • Sales of $1,499m, up 0.6%
  • Adjusted EBIT $202.8m, up 5% (excludes $45.5 million transformation costs)
  • Adjusted earnings per share of 111.5cps up 9.3% (excludes $45.5 million transformation costs)
  • Statutory EPS 82.6cps, -14.4%
  • Final dividend 26cps, up 4%
  • Full year dividends of 46.75cps, up 2.7%
  • Buyback of ~10.1m shares at a cost of $176m during FY19.
  • Net debt to EBITDA at 0.6x
  • Forecasts organic sales growth of 3%-5% in FY20
  • Forecasts EPS between 112ps to 122cps in FY20

“In an environment of challenging macro conditions and slowdown in certain economies, Ansell successfully navigated a series of external headwinds in F’19. Challenges included higher raw material costs, a weakened European economy, Brexit, heightened US rhetoric with import tariffs, and some indications of a potential slowdown in the American industrial sector,” commented Ansell CEO Magnus Nicolin.

The tough macro environment was blamed on a “disappointing” overall FY19 sales growth rate of 1.9%, with a 0.4% sales fall in its core industrial sales division offset by stronger 4% growth across its healthcare operations. 

The result is also muddied by the firm’s decision to back out $45 million of transformation cost that are related to significant restructures that in themselves make comparisons to prior periods complex. 

The stock is probably climbing this morning on management’s forecast for mid-single digit EPS growth through FY 2020.

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Motley Fool contributor Tom Richardson has no position in any of the stocks mentioned.

You can find Tom on Twitter @tommyr345

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 Motley Fool's purpose is to help the world invest, better. Click here now for your free subscription to Take Stock, The Motley Fool's free investing newsletter. Packed with stock ideas and investing advice, it is essential reading for anyone looking to build and grow their wealth in the years ahead. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson. 2019