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Ansell Limited raises dividend

Condom and glove maker Ansell Limited (ASX: ANN) has reported a 15% rise in its half-yearly profit to US$65.6 million on the back of a 9% rise in sales to US$703.6 million. Adjusted earnings per share also increased by 15% with the board declaring a US$0.17 cent dividend. At current exchange rates, Australian shareholders should receive a dividend of around 18.7 cents which is up on last year’s dividend of 16 cents.

The company stated that its global operations were experiencing a mixed recovery with the USA and Latin America leading the way. With reference to the Purchasing Managers Indices (PMI) the USA, Germany, the Eurozone and Brazil were all seeing signs of life while Russia, France and Australia were singled out as still struggling.

Ansell’s results can provide insights for a number of other Australian-based companies with global operations. Brambles Limited (ASX: BXB) is highly leveraged to increased demand for goods in both the US and Europe. Ansell’s comments regarding recovery in the USA could bode well for Brambles’ operations there too. Meanwhile Ansell sells a significant share of its gloves and associated products into the healthcare sector. Ansell experienced sales growth of 8% in this segment with the Europe, Middle East and Asia (EMEA) and North American divisions the strongest. This could mean reasonable growth for the likes of Sonic Healthcare Limited (ASX: SHL) and Ramsay Health Care Limited (ASX: RHC) as well.

Foolish takeaway

Management provided guidance for earnings per share in a range between US$1.10 to US$1.16. At the mid-point this equates to A$1.25 at today’s exchange rate. The share price has dropped around 2% in early Monday morning trade (but is still up over 20% in the past 12 months) to $18.87. This implies that Ansell is trading on a forward price-to-earnings ratio of 15.1, a multiple that certainly looks tempting considering the quality and growth potential of the firm.

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

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