UniPhar operating profit drops 3%

DRUG distributor UniPhar saw operating profits fall by 3% in 2007 to €18.8 million.

The company, which is owned by hundreds of pharmacists across the country, said turnover for the year was up by 7% to almost €719.6m.

At pre-tax level, profits for the year fell to €21.5m from €70.7m in 2006. The 2006 figure was boosted by the exceptional gain of €51.3m, the company made from the sale of land.

UniPhar’s shareholders will be paid 8 cents per share, an increase of 14% on 2006.

The company’s chief executive Jim Canavan said yesterday it was a challenging year for the industry, with Health Service Executive cuts on the prices of offpatent drugs and the recent cut to margins paid to pharmacists.

“The recent reduction in reimbursement to pharmacies is a savage blow which, if not reversed, will have a serious impact on margins. This will create much additional pressure in the system as pharmacies seek to recover lost margins,” Mr Canavan said.

He said the company has made its first acquisition in Britain with the takeover of Forth Medical and NorthStar Orthopaedics, and that Uniphar was on the look out for further acquisitions.

The annual report noted: “A strong cash flow and approval funding levels give us the opportunity to source and deliver business activities going forward.”

According to the accounts, the company’s cash balances stood at €1.3m at the year end, down from 8m, though shareholders’ funds increased to almost €130m from €111.9m.

The accounts show directors’ remuneration for the year increased to €926,000 from €644,000, and pension payments to directors increased by €82,000 to €242,000.

A payment of €457,000 was made to compensate directors for loss of office.