United Drug can spend €50m a year on acquisitions – CEO
UNITED Drug can comfortably spend about €50m a year on acquisitions for the foreseeable future, according to its chief executive Liam FitzGerald.
Speaking to the Irish Independent yesterday as the company delivered full-year results, Mr FitzGerald said that United Drug currently has a number of acquisition opportunities in its pipeline. The healthcare company completed five acquisitions at an initial cost of just over €100m in the financial year that ended in September. A further €38m in deferred consideration could also be payable.
Mr FitzGerald said those acquisitions contributed €700,000 in profits to the group in the financial year just ended and are expected to contribute €9m in a full year.
United Drug said yesterday that its adjusted operating profit climbed 10pc in the last financial year to €84.4m, while revenue at the group rose 5pc to €1.83bn.
The results were in line with analyst expectations, but shares in the group advanced over 4pc during the day.
The company's activities extend across wholesale drug distribution, packaging, sales and contract marketing and event management for pharmaceutical firms.
United Drug's outsourced sales, marketing and medical services division posted a 7pc rise in revenue to €214m and 2pc growth in operating profit to €21m. Its packaging unit delivered revenue of €161m, up 16pc, and €15m in operating profits, 26pc up on 2011. Its healthcare supply chain division, which includes its drug distribution business in Ireland, recorded a 3pc rise in sales to €1.46bn, and €48m in operating profit, up 9pc on 2011.
Its US business accounted for 27pc of its operating profit in the period, while 70pc of its profit is now generated outside Ireland. Mr FitzGerald said United Drug would build "slowly and cautiously" in markets including Japan, China and Brazil.
Mr FitzGerald said United Drug had considered purchasing Celesio's Cahill May Roberts drug distribution business, which has just been sold by the German firm to Uniphar, a co-op of Irish pharmacists, for €50m.
But he said that the deal "wasn't right" for United Drug given the purchase price being sought.
Mr FitzGerald said United Drug is poised to shift its stockmarket listing to London on December 12, ending its listing in Dublin. The group hopes to gain more exposure to international investors via the move.