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Ansell impresses investors despite difficult trading environment

Ansell (ASX: ANN) reported total sales of $US 1.37 billion, up 9% on the prior year with earnings before income tax (EBIT) up 11%. The company said it expects EBIT growth in the high single digits to low teens for FY 2014.

The health device manufacturer and condom maker identified several external environment headwinds on its full-year results. Manufacturing costs, foreign exchange impacts, competitive pressures and lower government healthcare spends are creating tough operating conditions.

Ansell is a truly global business with less than 6% of sales coming from Australia and fast growing emerging markets now representing 27% of sales. More than 60% of institutional ownership is held outside Australia and the company will report and operate in US dollars from the current financial year onwards.

The business launched 48 new products in the year at a rate nearly seven times higher than 2010. It also completed four new acquisitions, including the largest deal since 1995. Leveraged to the global macro environment a return to growth in Europe would benefit it.

A final dividend of 22 cents was announced, taking the full year payout to 38 cents, up 7% on the prior year. Earnings per share and cash profit were both up 5% for the year.

Foolish takeaway

The group’s balance sheet remains strong and given the necessity of its products and growth profile fundamentals the company’s continued success comes as no surprise. The stock is heading towards all-time highs but this should not put off investors in for the long-term.

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Motley Fool contributor Tom Richardson does not own shares in any of the companies mentioned in this article.

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