The Ansell Ltd (ASX: ANN) share price is rocketing higher today.
Shares in the S&P/ASX 200 Index (ASX: XJO) health and safety products company closed yesterday trading for $27.34. In morning trade on Tuesday, shares are swapping hands for $29.01 apiece, up 6.1%.
For some context, the ASX 200 is up 0.4% at this same time.
This outperformance comes following the release of Ansell's financial results for the full year ended 30 June (FY 2024).
Here are the highlights.
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Ansell share price leaps on FY 2024 results
- Reported sales of $1.62 billion, down 2.4% from FY 2023
- Earnings before interest and tax (EBIT) of $196 million, down 5.2% year on year
- Adjusted earnings per share (EPS) of US$1.055, down 8.5% but within guidance range
- Operating cash flow of $168 million, up 126% year on year
- Full year unfranked dividend of 38.4 US cents per share, down 16.3% from FY 2023
What else happened over the year?
The Ansell share price is surging, despite the 3.3% sales growth (in constant currency) of the company's Industrial segment being offset by an 8.0% sales decline in its Healthcare segment.
Management noted that Healthcare performance improved in the second half of the financial year as the effects of customer destocking in Surgical and Life Sciences diminished.
Ansell will pay a final unfranked dividend of 21.9 US cents per share. The full year dividends of 38.4 US cents per share represents a payout ratio of 40%, consistent with the company's dividend policy. Eligible investors can expect to receive that dividend on 12 September.
Among the biggest news of the year was Ansell's acquisition of KBU from Kimberly-Clark Corporation for $638.9 million. This transaction was completed on 1 July.
What did management say?
Commenting on the results boosting the Ansell share price today, CEO Neil Salmon said:
Sales and earnings improved throughout the year as healthcare end market conditions normalised, the contribution of new product innovation strengthened, and we exceeded the first year savings target of our Accelerated Productivity Investment Program.
These achievements helped us deliver adjusted EPS within our original guidance range and strong cash flow which included the benefit of planned inventory reductions.
For the last two to three years, we have been navigating pandemic-related headwinds in our Healthcare Segment, accentuated by customers drawing down excess inventory. These headwinds diminished through the second half as the effects of customer destocking reduced.
As for the KBU acquisition, Salmon added:
The acquisition increases our presence in fast growing Scientific markets, including Life Sciences, where very specific customer requirements for products used in cleanroom manufacturing environments and laboratories creates room for meaningful differentiation.
What's next?
Looking to what could impact the Ansell share price in the year ahead, the company forecast FY 2025 adjusted EPS will fall in the range of US$1.07 to US$1.27 per share, compared to the US$1.055 reported for FY 2024.
Management also expects improved EBIT in FY 2024 from increased sales, higher savings from its Accelerated Productivity Investment Program and the incremental contribution from KBU.
On the cost front, net interest costs are expected to increase by around $45 million on the increased debt from the KBU acquisition.
Capex of $60 million to $70 million is forecast, which includes completing the construction of Ansell's India Surgical manufacturing facility.
Ansell share price snapshot
With today's intraday boost factored in, the Ansell share price is up 26% over 12 months, not including the two dividend payouts.
