Ansell Limited (ANN)
All research reports and stock updates for Ansell Limited.
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Destocking
Group sales fell -11.5% on a constant currency (cc) basis, impacted by healthcare destocking partly offset by a small gain in the industrial segment.
Out of triage
Suffice to say, Ansell will be glad to see the back of FY22. The relatively good news is that things are looking less grim for FY23f, hence the company’s modestly cheerful EPS guidance has cajoled our recommendation up to a Hold.
Pointing at China
The glove manufacturing industry mistakenly expected a pricing fade from the extreme levels caused by COVID-19. Instead, a massive increase in Chinese capacity has flooded the lower end of the market that has dragged all prices down.
And...cough
Commodity prices have increased substantially, triggered by recent global events forcing key input prices up for Ansell. At the same time, overcapacity in the industry is causing glove prices to keep falling.
A bad hand
Ansell’s horrible first half result was in line with the downgrade announced on 31 January. A late move to slash costs saved the result from total disaster as operating conditions deteriorated significantly.
Spanked
Ansell’s guidance, reaffirmed at the November 2021 annual meeting, has succumbed to the impact of COVID-19. But the company has pointed the finger at an import ban on a key supplier and suggested the COVID impact is non-recurring. We think this falls short of reality and we maintain our Sell recommendation.