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Economic weakness puts holes in Ansell

ANSELL has disappointed investors with a 15 per cent hit to its first-half profit, announcing a share buyback to help underpin its shares.

The company, which makes medical gloves and condoms, blamed currency woes, a slowdown in China and exposure to weak European markets for its poor performance.

Ansell's net profit was $55 million in the six months to end-December, compared with $64.9 million in the previous corresponding period. Even as profits fell, the interim dividend increased by 1¢ a share to 16¢. The company's shares fell sharply on the result, closing down 5.7 per cent at $15.94.

Chief executive Magnus Nicolin said three acquisitions in the first half meant that earnings would be more heavily weighted in the second half.

''Overall … sales were flat, mostly due to economic weakness,'' he said. However, he was tipping a stronger second half, helped by the launch of a range of new products and contributions from recent acquisitions.

Analysts said the results were worrying for investors.

''It's a fairly bleak first-half result, with the company's trading revenues not showing any growth,'' UBS analyst Andrew Goodsall said. ''The first half numbers don't set up a lot of confidence.''

Despite the reverse in first-half profits, Mr Nicolin was sticking to the company's recent full-year guidance of single percentage to low double-digit earnings per share growth.

Ansell plans to buy back between 2 million and 3 million shares.