The share price of Ansell Ltd [ASX:ANN] is surging today. Up 15.5% at time of writing.
As a manufacturer of medical and industrial equipment, Ansell is helping fight the coronavirus. Producing all manner of protective gear, such as surgical gloves, for key personnel.
And right now, demand for that gear is through the roof…
Demand keeps guidance in check
For many listed companies, forecasts are well and truly out the window.
FY20 will forever have an asterisk next to it, thanks to this virus-induced downturn.
Ansell is one of the few to buck the trend. Today they were fortunate enough to declare that their earnings are still on target. Propped up by the aforementioned demand.
However, it won’t be a record result either. Restrictions on exports as well as low growth globally will prove challenging. At least in the short term.
Long term this virus is proving just how valuable companies like Ansell are. Emboldening them to explore diversification of their own business to new regions. As they noted in today’s announcement:
‘The Ansell teams are working tirelessly to maximize output including making selective investments in new capacity and by leveraging manufacturing locations that are not affected and we expect to be able to continue to ship large quantities of product to key markets.’
It’s a smart move from a company that has found itself in the right place at the right time.
What will be interesting to see is how long this demand will linger. Obviously, you’d expect things to settle down again once things become more contained.
However, the lingering effects of this virus could last far longer. Especially from a psychological perspective.
Cleanliness could very well be a long-term trend following this outbreak.
Time will tell.
For now though, Ansell will simply be happy to meet expectations. Proving once again that investors can make money even during a crisis.
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For Money Morning