Ansell full-year profit drops 15pc amid currency fluctuations

Ansell may sell its condoms business following a review of the division.

Ansell’s chairman Glenn Barnes and CEO Magnus Nicolin. Pic: Janine Eastgate

Condoms and gloves manufacturer Ansell’s sexual wellness business could be sold as the company launches a review of the division.

The company (ANN) revealed today, after delivering a 15 per cent slide in full-year profit, that Goldman Sachs would review the sexual wellness business, with a sale among the options.

Managing director Magnus Nicolin said if that business was sold the company would have less exposure in China, Brazil and Australia.

“Is its value greater with Ansell or to someone else? We are testing that through the review process,” he said.

“We are going to be exploring and investigating where this business can go, we haven’t decided to sell and will only do it if it’s the right thing to do for shareholders.”

Ansell’s shares rallied 13 per cent despite the 15 per cent slide in profit to $159.1 million for the 12 months through to June.

Revenue for the company dropped 4.4 per cent to $1.57bn.

Currency market volatility heavily impacted the multinational group, which was founded in 1929. Sales were down 4 per cent year-on-year, but were steady on a constant currency basis. Earnings before interest and tax was also 8 per cent higher in constant currency.

Ansell, which sells protective clothing to industrial and mining companies as well as medical services, said it was expecting organic revenue growth in the low to mid-single digits over the next two to three years, even in a low growth economic environment.

Chief executive Magnus Nicolin said achieving 8 per cent constant currency EBIT growth in challenging market conditions was “a solid result and cash flow was strong”.

“Overall our FY16 results were at the low end of our original guidance, we nevertheless made significant progress particularly in the second half, delivering against all the key priorities we outlined midyear,” Mr Nicolin said.

Chairman Glenn Barnes said Ansell had been anticipating the challenging year, which was marred by a weak global economy and currency fluctuations. “Nevertheless, we continued to make progress against our strategic priorities and again demonstrated the strong cash generating characteristics of our businesses,” he said.

Ansell will pay a 23.5c unfranked dividend, bringing the year’s total distribution to 43.5c a share — a 1 per cent lift on year-on-year.

Ahead of the result the group’s shares were down more than 8 per cent over the year to date, against a benchmark index which has gained 4.4 per cent over the same time.

However, it recouped these losses in early deals, with its shares bounding 13.2 per cent to $22.265 at 11.20am (AEST).