Another year, another business reshuffle at pharma outsourcer UDG Healthcare (UDG) which has, once again, left full-year numbers looking a little puzzling. In April 2016 the group disposed of the United Drug Supply Chain businesses and vaccinations provider MASTA in order to focus on manufacturing and communications services where there is huge potential for growth. The disposals brought in €132m (£112m) of profit and swung the balance sheet into a net cash position, providing scope for acquisitions.
Reported figures omit the €17.6m of operating profit the discontinued businesses contributed prior to their disposal but, excluding that and other one-offs, operating profit rose 8 per cent to €104m. The latter growth was largely as a result of the excellent US performance of the Sharp packaging business, where operational capacity has been increased by 30 per cent.
Ashfield, the group's largest contributor to revenue, benefited from six months of operations from pharma communications business Pegasus. But even without this acquisition, total revenue from continued operations were up 7 per cent at constant currencies. The acquisition of medical audit provider STEM after the period-end is expected to be immediately earnings enhancing.
Prior to these results, broker Liberum forecast adjusted EPS of 33ȼ for the year ended September 2017, growing to 38ȼ in FY2018.
UDG HEALTHCARE (UDG) | ||||
|---|---|---|---|---|
| ORD PRICE: | 625p | MARKET VALUE: | £1.54bn | |
| TOUCH: | 625-626p | 12-MONTH HIGH: | 693p | LOW: 491p |
| DIVIDEND YIELD: | 1.6% | PE RATIO: | 30 | |
| NET ASSET VALUE: | 293ȼ* | NET CASH: | €128m | |
| Year to 30 Sep | Turnover (€bn) | Pre-tax profit (€m) | Earnings per share (ȼ) | Dividend per share (ȼ) |
|---|---|---|---|---|
| 2012 | 1.83 | 59.0 | 20.0 | 9.0 |
| 2013 | 2.03 | 33.8 | 11.5 | 9.6 |
| 2014 | 0.76 | 108 | 40.4 | 10.1 |
| 2015 (restated) | 0.92 | 53.6 | 16.2 | 11.0 |
| 2016 | 0.94 | 75.2 | 24.9 | 11.6 |
| % change | +3 | +40 | +53 | +5 |
Ex-div: 19 Jan Payment: 13 Feb *Includes intangible assets of €442m, or 179ȼ a share £1=€1.18 | ||||
