Kaline AU Says - ASX: ANN Share Price Dips Following 1H FY24 Results

Kaline AU Says - ASX: ANN Share Price Dips Following 1H FY24 Results The Ansell Ltd (ASX: ANN) share price experienced a decline of 4.73% to an intraday low of $23.04 after the release of its 1H FY24 results. Currently trading at $23.44, down 2.86%, investors are reacting to the news of an 18% dividend cut. ASX healthcare stocks, representing companies involved in various aspects of the healthcare sector, are closely monitored alongside Ansell Ltd's performance for insights into market trends and investor sentiment in the healthcare industry.

Key Financial Metrics for 1H FY24: ● Sales of US$784.9 million, down 7.6% on a constant currency basis compared to the prior corresponding period (pcp), and down 6% on a reported basis. ● EBIT of US$78.2 million, reflecting a 6.4% decline on constant currency terms and a 14.5% decline on reported terms. ● EBIT margin of 10%, down from 11% in the pcp. ● Adjusted earnings per share (EPS) of 41.4 cents, a decrease from 50.6 cents in the pcp. ● Unfranked interim dividend of US16.5 cents per share, payable on 14 March, marking an 18% decrease from the pcp. The dividend represents a 40% payout ratio in line with Ansell's dividend policy.

Performance Highlights and Challenges: ● Ansell reported sales growth and margin improvement in its industrial segment, with a 46.7% increase in EBIT on a constant currency basis.

● The healthcare division experienced significant weakness, with a 46% EBIT decline on a constant currency basis, attributed to lower sales in the surgical and life sciences category. ● The company implemented a targeted working capital reduction strategy, resulting in a strong operating cash flow of US$57.9 million. ● Ansell's Accelerated Productivity Investment Program, aimed at adjusting to post-pandemic operating conditions, saw $7 million in savings in 1H FY24 and targets $20 million in the second half. ● The company narrowed its guidance range for FY24 adjusted EPS to between US 94 cents and US 110 cents, with statutory EPS expected to be in the range of US 54 cents to US 70 cents.

Management's Perspective and Outlook: Neil Salmon, Managing Director and CEO of Ansell, expressed satisfaction with the cash flow delivery and the strong performance of the Industrial GBU. He anticipates improvement in healthcare division performance as market headwinds moderate.

Looking ahead, Ansell expects sales growth in both industrial and healthcare segments for 2H FY24. With a focus on executing growth and productivity strategies, the company aims to demonstrate progress in overcoming recent market disruptions.

Ansell Share Price Performance: The Ansell share price has declined by 13.11% over the past 12 months, contrasted with a 4.18% increase in the S&P/ASX 200 Index (ASX: XJO). Despite challenges, the company remains committed to navigating market dynamics and delivering value to shareholders.