Ansell shares have climbed on news the protective gloves manufacturer plans to extend its yearlong share buyback after failing to find takeover targets on which to splash its excess cash.
The company will seek approval at its November 14 annual general meeting for the on-market buyback of 26.4 million shares – worth about $700 million before Tuesday’s market open.
Ansell’s stock duly climbed by as much as 2.76 per cent to $27.21 in early trade, and shares in the company were still 1.47 per cent higher at $26.87 at 1045 AEDT.
“In the absence of sufficient appropriate opportunities, and with excess cash on the balance sheet, the board believes that continuing our buyback program provides the most beneficial use of this capital for shareholders,” Ansell said in a statement to the ASX.
Ansell made a $US345 million gain when it sold its Sexual Wellness condom business to a Chinese consortium in 2017.
It has since bought protective glove manufacturer Ringers Gloves for $US70 million, and earlier this year announced plans to shut three production facilities in Mexico and South Korea while expanding operations in Vietnam, Sri Lanka and Malaysia.
Excluding $US45.5 million in “transformation costs”, Ansell’s profit for the 12 months to June 30 rose 4.7 per cent on a constant currency basis to $US150.9 million ($A222 million).
Its FY19 sales of $US1.5 billion ($A2.2 billion) were up 3.2 per cent from a year ago on a constant currency basis.