Drug firm confident as profits rise

PHARMACEUTICAL group United Drug has produced a further set of solid results for the six months to March 31, 2003.

United has also announced a 6.4 for 1 share split in a move to make the stock more attractive to ordinary investors. On the back of the good results, which showed sales and profits up 18% and 22% respectively the shares rose 10c or 1% in early trading in Dublin to €13.70.

During the period, revenues rose 1% to €561.4m from €475.5m. Interim pre-tax profits rose 23% to over €16m, while trading profit was 22% higher at €17.7m. Adjusted earnings per share rose 16% to 43.5c, in line with forecasts.

If approved the share split will reduce the price of shares from their current €13.60 level to a more modest €2.12 with the idea behind the move to make the market in the shares more liquid by enticing in private investors.

On the basis of the figures some brokers expect to upgrade earnings for 2004 and 2005 marginally. Furthermore, shareholders are to benefit from a 14% hike in the interim dividend to 8c per share reflecting the good results. The better dividend is also in line with group policy of rewarding shareholder loyalty with improved dividends.

The first half was marred slightly by a €1.1m charge relating to restructuring costs at Ventiv Health, closing the operation and transferring its business to Ashfield Healthcare which streamlines British and Irish wholesale business.

United Drug chairman Martin Rafferty said: & “Our strategic policy of continuing further investments in infrastructure with bolt-on acquisition opportunities, has strengthened the foundations and commercial base of the group.”

He added the strategy of focusing on leadership positions in high growth sectors of the healthcare supply chain is continuing to pay off for the group and this strategy is being underpinned by further capital investment in contract distribution and the medical & scientific sectors. The chairman said: “I am confident United Drug will report another good year.”