UDG brushes aside Brexit risks but will now report in dollars
Irish group UDG Healthcare will start reporting its results in US dollars from October because over half its profits are now generated in the United States.
UDG Healthcare sold its drugs distribution business earlier this year for €407m. That has resulted in a marked shift in its geographic profile. Apart from the US fuelling profits, UDG Healthcare has also said that America will be the main future focus of its expansion.
"The group's US-based businesses are demonstrating the greatest growth opportunities and future corporate development activity is likely to be US-focused," it said in a trading statement yesterday.
It added that the company's board has decided that from October 1, the group will switch its reporting currency to the US dollar.
Dividends will also be declared in US dollars, but will be payable in either dollars, euros, or sterling. UDG Healthcare is listed in London, where it's a member of the FTSE-250.
The company, whose chief executive is Brendan McAtamney, also said that it expects adjusted, diluted earnings per share to rise by between 6pc and 8pc in the current financial year, on a constant currency basis.
UDG Healthcare's activities include sales, marketing and medical communications outsourcing, and pharmaceutical packaging. Its largest division - Ashfield - provides outsourced services from sales, marketing and patient engagement to drug companies.
The group said yesterday that trading across the Ashfield unit had been "good" during the three months to June compared to the corresponding period last year.
But its Sharp packaging division performed strongly, and "well ahead" of last year's corresponding quarter, it said.
Trading momentum at Sharp's US operations remains positive, it added.
Its Aquilant unit generated operating profits that were "slightly behind" last year's quarterly figure, it added.
Aquilant provides healthcare products and services to the medical sector.
UDG Healthcare also said that it has seen no impact yet from the UK's decision to leave the European Union.
"While the ultimate timing and implications of the UK's exit from the EU remains uncertain following the Brexit referendum decision, the group has not yet seen any material impact on underlying trading performance," it said.
"The majority of the group's operating profits are generated outside of the UK.
"In addition, the group's UK businesses mainly operate in market segments which the group does not expect will be materially affected by the UK's decision to leave the EU."