Condom queries as Ansell sales rise

Ansell has fielded several inquiries about the potential sale or demerger of its condoms business.

Ansell has upped its earnings guidance for the full year

Ansell has upped its earnings guidance for the full year, helped by improving sales for its range of medical gloves after last year’s supply issues as well as a continuation of generally favourable economic conditions across its key regions.

Updating shareholders at its annual general meeting in Melbourne yesterday, Ansell also revealed it has had approaches from interested parties concerning the potential sale or demerger of its condoms business, with the board reviewing the portfolio and its future within the company.

At the release of its full-year results in August, Ansell flagged the possible sale of its condoms business, which includes SKIN, Lifestyles and Jissbon, with the division its oldest but also its only retail-focused business and making up less than 15 per cent of group sales.

Last year Ansell’s sexual wellness division generated pre-tax earnings of $US31 million against $US89m in earnings for its industrial gloves and products arm and $US52.3m from medical product sales.

Chief executive Magnus Nicolin yesterday surprised investors with some good news, saying that after the completion of the first quarter the company expected earnings per share of $US1 to $US1.12, up from a previously range of between US98c and $US1.12.

The improved earnings guidance reflects an underlying earnings increase of 4 per cent to 17 per cent for 2017.

After the meeting, Mr Nicolin told The Australian the outlook was being generated by a better performance across all its divisions.

“The medical business is coming back. We had some challenges last year and now we are seeing it back to form. Industrial is having continued growth driven by innovation primarily, and sexual wellness is growing nicely,’’ Mr Nicolin said.

“Automotive, life-sciences and laboratory products were also proving highly profitable on strong sales volumes.’’

Shares rose more than 1 per cent on the better outlook, closing up 23c at $23.08.

Mr Nicolin said the review into Ansell’s condoms business was progressing and had attracted interest from several companies. “We are exploring our options and are seeing a lot of incoming interest, potential bidders or people coming in with ideas saying, ‘Could we merge or do something else?’

“All kinds of ideas are being offered up.’’

Later at the meeting shareholders overwhelmingly supported the adoption of the remuneration report, after the company earned a ‘first strike’ last year and shareholders blocked the award of 150,000 options to Mr Nicolin.