Tuesday 19 June 2018

Allergan's Forest Labs pays €726m in dividend

Stock image
Stock image

Gordon Deegan

Dublin-based pharma firm Forest Laboratories paid out a dividend of $891m (€726m) in 2016.

And new accounts for Forest Laboratories Ireland Ltd show that pre-tax profits at the company declined by 29pc to $28m.

The company - owned by Dublin-based Allergan plc - sustained the drop in profits after revenues declined by 34.6pc, from $529.6m to $346.7m.

Numbers employed by the company rose from 268 to 282 with staff costs totalling $20.4m.

Directors for Forest Laboratories said that in 2016, the company continued with strong output performance in both commercial and development product activities, contributing significantly to Allergan's plc top line revenue number.

The directors said sales value, which has been driven by a cost plus model since July 1, 2014, was lower in the period due to a lower 'cost of goods sold base' primarily due to royalty expense reduction.

On the risks facing the company, the directors said "new product development is subject a great deal of uncertainty, risk and expense.

"Promising pharmaceutical compounds may fall at various stages of the research and development process, often after a great deal of financial and other resources have been invested in their development."

In July 2014, Actavis - now known as Allergan plc and located in Dublin - purchased Forest Laboratories global business for $28bn in cash and equity.

The accounts show that Forest Laboratories Ireland Ltd recorded an operating profit of $26.52m in 2016 and net interest receivable of $1.5m increased the company's profits.

The dividend payout reduced the company's accumulated profits from $1.1bn to $249.6m.

The company's shareholder funds stood at $252m at the end of December 2016.

The firm's workforce is broken down into 263 in manufacturing and 19 in administration.

In line with the decrease in revenues, cost of sales in 2016 decreased from $483m to $314m. The company's administrative expenses also decreased, going from $9.63m to $5.88m.

R&D costs in 2016 totalled $2m while non-cash depreciation costs totalled $9.2m.

The company manufactures for another group company for which it earns a mark-up on costs. Pay to directors increased from $425,000 to $697,000 and this was largely due to a $223,000 gain by directors in the exercise of options.

Irish Independent

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