Business Irish

Wednesday 18 September 2019

UDG 'hedged against Brexit' as it targets M&A

Firepower: UDG Healthcare CEO Brendan McAtamney says company has up to $500m to spend on acquisitions
Firepower: UDG Healthcare CEO Brendan McAtamney says company has up to $500m to spend on acquisitions
John Mulligan

John Mulligan

UDG Healthcare is hedged against Brexit and has the capacity to splurge between $400m and $500m (€353m to €442m) on acquisitions across its European and US markets, according to CEO Brendan McAtamney.

He said that there has been no impact on its activities in the UK as a result of the planned exit from the European Union next March, and despite the political upheaval that it has caused.

UDG Healthcare operates two divisions, Ashfield, which focuses on the provision of communications, advisory and clinical services, and contract pharmaceutical packaging unit Sharp, which has facilities in Europe and the United States.

"The comms business is going really well, both in the UK and in the US," Mr McAtamney told the Irish Independent.

"In the UK, more than half of our clients are not actually in the UK - they're global clients," he said.

"Our exposure to sterling from the UK is about 23pc of the group. And of that 23pc, about 50pc is from clients outside [the UK]. There's a big hedge there for whether it's a soft or a hard Brexit. We've got pretty good shelter to the upcoming Brexit."

Mr McAtamney was speaking as UDG Healthcare released full-year results for its financial year that ended in September.

It net revenue was 6pc higher at $1.1bn (€971m) on a constant currency basis, while its operating profit was 12pc higher on the same basis, at $147.5m (€130.2m).

UDG said that its Ashfield business performed strongly in the year, with that unit's adjusted operating profit climbing 16pc to $98.4m (€86.8m) on a constant currency basis as it was boosted by acquisitions.

The communications and advisory part of Ashfield now accounts for 63pc of the unit's operating profit, compared to 20pc five years ago.

Ashfield's commercial and clinical activities, where it provides contract sales and patient support services in 18 countries, fared less well, with net revenues declining 6pc to $448.2m (€396m) and operating profit dropping 10pc to $36.3m (€32m).

The group's Sharp packaging business performed well, driven by the US. Revenue at the division rose 3pc to $311.1m (€274.8m), while operating profit was up 11pc at $45.8m (€40.4m).

The European side of the business made a $1.1m operating loss.

Irish Independent

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