United Drug's reliance on Irish market falls as profit climbs 7pc
UNITED Drug has continued to reduce its reliance on the Irish market, with 70pc of its profits in the first half of its financial year having been derived from overseas.
Releasing first-half results yesterday, the company said that adjusted operating profit in the six months to the end of March climbed 7pc to €39.5m, while revenue was unchanged at €894.2m.
United Drug's activities include medicine distribution, pharmaceutical packaging, medical instrument sales and event management.
Chief executive Liam FitzGerald said yesterday that the group's US businesses were now contributing 25pc of overall profits.
The company's wholesaling business has been hit in Ireland after the Government moved to reduce its overall drug bill.
The previous government introduced cuts of 40pc in 2010 on the prices of over 300 drugs for which a generic version already existed in the market.
Last year, United Drug secured 150 redundancies from its 700 workforce in Ireland in a bid to save €5m a year.
Results for the first half were in line, or slightly better than had been expected by analysts.
In its sales, marketing and medical division, revenue fell 15pc year on year to €86m. United Drug said this was a result of changes to contractual arrangements with certain customers.
The healthcare supply chain business posted a 1pc rise in revenues to €730m for the first six months of the financial year.
Its packaging and speciality division recorded a 14pc rise in revenue for the period, to €78m.
United Drug said its US packaging business had performed "very strongly" in the first half, but that in Europe trading performance for the unit had been "challenging" and below last year's levels.
Goodbody Stockbrokers analyst Donal O'Neill said that in Ireland, United Drug has continued to win market share in the wholesale drug distribution sector despite a 4pc decline in the overall market value.
He said United Drug's balance sheet "remains very strong", leaving the company "well placed" to pursue accretive acquisitions.
Shares in United Drug closed down 2.1pc, or 5 cent, at €2.28 in Dublin yesterday with 290,302 shares traded.