Results for United Drug (UDG), now know as UDG Healthcare, were complicated by a mixture of exceptional charges totalling almost €30m (£25m), as the medicine wholesaler and pharma services business went through the process of restructuring its UK operations. Strip these out and underlying operating profits rose by 13 per cent to €95.1m, most of which was generated by acquisitions.
UDG's core medicines supply business is centred on the Irish Republic, where austerity measures have been a feature for several years. However, one positive benefit is that UDG's market share has grown; higher sales of €1.46bn, a 1 per cent increase on 2012, showed the impact of this trend. Unfortunately, the lower value of the market meant divisional operating profits still edged down to €46.2m, but UDG looks well-placed for a recovery in Ireland.
The sales and pharma marketing division benefited most from acquisitions, with revenues increasing by 74 per cent to €372m, and operating profits up 55 per cent to €31.8m. Management reckons the trend towards outsourcing sales and marketing functions at big pharma companies will boost this segment in particular; pharma outsourcing already generates a third of UDG's operating profits.
Broker Investec forecasts pre-tax profits for 2014 of €86m, giving EPS of 28.1¢, compared with €81.8m and 27¢ previously.
UDG HEALTHCARE (UDG) | ||||
|---|---|---|---|---|
| ORD PRICE: | 310p | MARKET VALUE: | £748m | |
| TOUCH: | 309-310p | 12-MONTH HIGH: | 362p | LOW: 231p |
| DIVIDEND YIELD: | 2.6% | PE RATIO: | 32 | |
| NET ASSET VALUE: | 174¢* | NET DEBT: | 57% | |
| Year to 30 Sep | Turnover (€bn | Pre-tax profit (€m) | Earnings per share (¢) | Dividend per share (¢) |
|---|---|---|---|---|
| 2009 | 1.72 | 39.1 | 14.2 | 8.00 |
| 2010 | 1.72 | 54.4 | 18.7 | 8.40 |
| 2011 | 1.74 | 44.1 | 15.1 | 8.66 |
| 2012 | 1.83 | 59.0 | 20.0 | 9.04 |
| 2013 | 2.03 | 34.9 | 11.8 | 9.56 |
| % change | +11 | -41 | -41 | +6 |
Ex-div: 27 Nov Payment: 24 Feb *Includes intangible assets of €391m, or 162¢ a share £1=€1.20 | ||||
