UDG Healthcare upbeat on growth prospects as profit increases 13pc to €95m
Full-year results at UDG Healthcare – formerly known as United Drug – came in at the top end of expectations.
But shares in the company fell as it incurred some non-recurring charges related to its rebranding that will have a marginal negative impact on its earnings per share in the current financial year.
Revenue at the group, which is engaged in pharmaceutical packaging, marketing and distribution, rose 11pc to €2.03bn in the 12 months to the end of September.
Operating profit was 13pc higher at €95.1m. Its US operations accounted for 34pc of operating profits, up from 26pc in 2012. UDG Healthcare said that its US packaging operations and its commercial services unit had performed strongly.
The US, UK and eurozone each generated circa one-third of the group's operating profits during the year, with the US increasing its share by eight percentage points to 34pc, according to UDG Healthcare chief executive Liam FitzGerald.
He said the company had made "substantial progress" in its last financial year.
"The group has considerable long-term financing facilities available and good internally generated cash flow to support our growth objectives," he said.
UDG Healthcare holds strong market positions in attractive markets and remains very positive about its future growth prospects, added Mr FitzGerald.
Profits at UDG Healthcare's sales, marketing and medical division rose 74pc to €371.8m in the last financial year.
The unit's operating profits climbed 55pc to €31.8m, accounting for a third of group operating profits.
At its healthcare supply chain division, revenue edged 1pc higher to €1.47bn, while operating profits slipped 4pc to €46.2m.
The company distributes pharmaceuticals across Ireland and the UK.
It has invested heavily in automating and expanding its Dublin wholesale facility, a process that will be completed in the first quarter of next year, according to the firm.
UDG Healthcare's packaging business saw revenue rise 22pc to €196m last year, with operating profit growing 11pc to €17.2m.
"We continue to see growth opportunities in the European packaging market and have spent 2013 restructuring our business to capture these opportunities," said UDG Healthcare. It has been transferring operations in its UK packaging arm to sites in the Netherlands and Belgium and will close the UK business next month.
Analyst Jack Gorman at Davy Stockbrokers said that UDG Healthcare shares remain on an "attractive valuation" compared with peers, especially given its ambition to double its earning base within five years. Shares in UDG Healthcare, which moved its listing to the UK last year, fell 3.1pc in London to £3.04 yesterday.