Why the Asaleo Care (ASX:AHY) share price is up 5% today

The Asaleo Care (ASX: AHY) share price is 4.9% higher in late morning trade. We look at the company’s full-year results to see why.

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The Asaleo Care Ltd (ASX: AHY) share price is gaining today, up 4.9% at $1.43 at the time of writing. This follows the release of Asaleo’s full-year financial results for FY20.

What did Asaleo Care report?

The personal hygiene products producer and distributor reported a 2.3% increase in revenues from 2019, to $419.2 million. Asaleo Care said its retail segments and B2B incontinence healthcare collectively increased by 6.7%.

The company reported underlying earnings before interest, tax, depreciation and amortisation (EBITDA) of $87.2 million, having earlier given an EBITDA guidance in the range of $84-87 million. Underlying EBITDA from its continuing business was $89.2 million, up 6.3%.

Statutory net profit after tax (NPAT) increased by 46.2% to $32.3 million. And the company reported it continues to reduce its net debt, down to $94.9 million from $139.2 million in the 2019 financial year.

Asaleo Care will pay a dividend of 3 cents per share (cps), fully franked, with a payment date of 31 March. Investors who want in on the dividend need to own shares by 16 March.

The company revealed it had not received any COVID-19 related government assistance.

Words from the management

Commenting on the results, Asaleo Care CEO Sid Takla said:

Despite the persistent challenges of 2020, we delivered full year earnings ahead of guidance, revenue growth across both Retail and B2B segments, and delivered market share gains across key retail categories. Our focus remains on executing against our strategic plan, sustaining investment in our brands, driving innovation, and creating efficiencies across our business.

We have entered FY21 with a strong balance sheet and the lowest level of debt since listing, which affords us the capacity to fund ongoing dividends and the flexibility to explore future acquisition opportunities. Asaleo Care is now firmly on a path towards sustainable earnings growth, with longer-term favourable tailwinds supporting our categories…

Takla pointed to an increasing focus on quality aged care, better hygiene awareness, and growing demand for locally produced products to support the company’s growth ambitions.

Looking ahead, Asaleo Care is targeting 5-7% revenue growth and EBITDA of $90-93 million for the 2021 financial year.

Asaleo Care share price snapshot

Asaleo Care’s share price hit a 52-week high on Monday after the company confirmed it was in discussions with Essity Aktiebolag to acquire the outstanding ordinary shares in Asaleo.

The company’s shares are up 31% over the past 12 months, compared to a 1% loss on the All Ordinaries Index (ASX: XAO). Year-to-date, the Asaleo Care share price is 5.15% higher.

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Motley Fool contributor Bernd Struben has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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