Like Sonic, who reported yesterday, Ansell has been one of the biggest listed beneficiaries of the pandemic.
And just as Sonic saw revenue, earnings and payments to shareholders surge on the boom in tests and revenues that flow from those 30 million procedures around the world in the year to June, Ansell has also seen sales, profits and returns to shareholders surge from protecting as many people as possible from getting Covid and its variants.
As Ansell chair John Bevan put it in the company’s 2020-21 results on Tuesday:
“The COVID-19 pandemic has continued to be the dominant influence on the global economy this year as countries recover or succumb to new waves. As a result, Ansell’s mission to provide innovative safety solutions in a responsible and reliable manner has never been clearer.
“This partly contributed to the company upgrading EPS guidance three times throughout 2021 financial year and achieving EPS of 192.2¢.”
“To meet higher demand for some of our products, we increased our capital expenditure to $US82.7m, a 36.5% increase on the prior year. We plan on maintaining the spend at elevated levels for financial year 2022 and are confident that we can deliver the desired returns from these investments.
“It is important that our shareholders are rewarded and as a result, we have declared a final dividend of US43.6¢ which takes full year dividend to US76.8¢, a 53.6% increase compared to the prior year and a 40% payout ratio.
“We will also continue to assess share buybacks from time to time as part of our capital allocation strategy,” he told the ASX in Tuesday’s release.
Ansell reported sales of $US2.027 billion, up 25.6%; a 330bps growth in earnings before interest and tax profit margin and 59.9% growth in earnings per share (helped by a buyback).
Profit attributable to shareholders jumped 57.5% to $US246.7 million for the year to June.
Final dividend for the year was 43.6 US cents (a 40% payout ratio), taking full year dividend to 76.8 US cents and up 53.6% over 2019-20.
Directors said the higher results were “driven by higher production volumes, pricing/mix benefit and Selling General and administration expenses (SG&A) operating leverage. This was partly offset by elevated labour and freight costs combined with increase in inventory provisions.”
CEO, Magnus Nicolin (who is about to retire) said in Tuesday’s release that “The focus for us this year has been to continue serving our customers and bringing our major capacity expansions into production despite the challenging operating environment.”
“We were able to get 12 new glove lines and several new body protection smart lines live which helped to deliver the results we saw for 2021 financial year and will also support growth for 2022 financial year and beyond.
“In addition to this, we ensured that the business is well positioned for the post COVID-19 environment by continuing to invest in our sales force, customer experience, product innovation and digital capabilities.”
