Latex product group, Ansell says it expects sales in the first half of 2009-10 to be lower due to a subdued economic outlook as it prepares for a small fall in annual earnings.
The company widened its guidance for 2010 earnings per share, and that strongly suggests no improvement, and in fact a dip on the 2009 outcome of around 8%.
The company yesterday reported a net profit for the year ended June 30 of $A121.4 million, up from $A102.6 million in the previous year.
But in US dollars terms, its profit for 2008-09 was down 1.6% to $US91.7 million.
Reported earnings per share for the year was 66.3 US cents, up 0.3% from 66.1 US cents, and within guidance.
Ansell said it had not escaped the global economic crisis, which has been felt strongly in its occupational business.
"Ansell expects a subdued global economic outlook in fiscal year 2010 and is continuing to reduce costs, while ensuring it is positioned to take advantage of growth opportunities," chairman Peter Barnes said in a statement on Monday.
Ansell said it now expects EPS for 2009-10 to be in a range of 56 US cents to 62 US cents, which is a wider range than previously advised.
"However, our product diversity and strong balance sheet stood us in good stead and it is particularly encouraging to see the EBIT improvement in our Professional business.
"The Board is pleased to have been able to continue with Ansell’s practice of steady dividend growth,” chairman Peter Barnes said in yesterday’s statement and profit report.
"The Board has announced an increased final dividend of A16¢ (A15.5¢ in 2008) per share unfranked.
"The total dividend paid for F’09 will therefore be A28c, up 5.7% on F’08’s A26.5c."
CEO, Doug Tough said in a statement yesterday:
"The global recession impacted sales and profitability in our Occupational business and resulted in a build up of inventory at the end of the first half.
"The second half saw a focus on reducing this excess inventory and as of 30 June, 2009, this goal had been achieved.
"Despite the difficult environment, our financial discipline helped us to steadily improve our accounts receivables metrics and deliver our best year of free cash flow generation.”
“Our Occupational business is going through a very difficult period.
"New products and channels are helping but cannot make up for the lost sales in key verticals such as automotive and general purpose manufacturing.
"Professional, with its strong product range, has had a good year. Consumer made excellent sales progress in the Chinese, Brazilian and US markets, but struggled in Poland and Russia.
"EBIT margins in both Professional and Consumer improved on last year, with lower input costs a key driver.”
