The Motley Fool

Results: How CSL Limited’s (ASX:CSL) profits jumped 29% this year

The CSL Limited (ASX: CSL) share price rose 2% to $205.39 following the announcement of bumper results this morning. For the full year to 30 June 2018, CSL reported 15% growth in revenue to US$7.6 billion (all figures in USD) and 29% growth in net profit after tax to $1.73 billion.

This equates to diluted earnings per share of $3.81 and dividends per share of $1.72, unfranked. CSL ended the year with approximately $3.5 billion in net debt. Research development expenditure fell slightly to just below 10% of revenue, with $702 million spent on R&D in the year.

Much of the growth was driven by wider margins, with earnings before interest and tax (EBIT) margins rising from 25% to 30%. CSL’s return on invested capital (ROIC) improved from 24.5% to 25.9%.

During the year CSL also delivered growth across almost every aspect of its business, with CSL Behring delivering sales growth in every region:

Source: Company presentation

Management also reported strong growth in the numbers of plasma collection centres being opened during the year. Plasma collection is a good leading indicator of growth in CSL’s blood products – CSL collects the plasma to turn it into medical products for use in patients.

Recently acquired vaccine business Seqirus also delivered strong growth, growing its overall sales despite sharp falls in emerging markets and Asia Pacific:

Source: Company presentation

In its outlook for financial year 2019 (FY19) CSL guided for above-market collections growth, which means it will be attempting to grow market share in plasma collection. CSL noted that supply of plasma remains a limiting factor for the industry.

Management also guided for approximately $1.2 billion of capital expenditure as well as a ~$200 million increase in R&D expenditure to bring research spending up to 10% of revenue.

CSL has several exciting products in Phase 3 trials this year and appears set to grow for the near future.

At $200 a share it’s not cheap by any measure, but I wouldn’t be inclined to sell any shares.

The ASX small cap up 285% with no sign of stopping...

One Australian company has developed a state of the art device that's revolutionizing hospitals all over the world. Even better, this device is so profitable that the company rakes in 90% margins. That's a lot of cash. So no wonder the stock's up 285% since 2008 – with no signs of stopping...

To discover the name and code, simply click the link below. You'll discover our expert's #1 medical technology pick... and you can decide for yourself whether to get invested today.

Click here to claim your free report.

Motley Fool contributor Sean O'Neill has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. 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.

5 ASX Stocks for Building Wealth After 50

I just read that Warren Buffett, the world’s best investor, made over 99% of his massive fortune after his 50th birthday.

It just goes to show you… it’s never too late to start securing your financial future.

And Motley Fool Chief Investment Advisor Scott Phillips just released a brand-new report that reveals five of our favourite ASX stocks for building wealth after 50.

– Each company boasts strong growth prospects over the next 3 to 5 years…

– Most importantly each pays a generous dividend, fully franked.

Simply click here to find out how you can claim your FREE copy of “5 ASX Stocks for Building Wealth After 50.”

See the stocks now