United Drug ‘would buy’ Celesio’s European assets

HEALTHCARE services company United Drug would be interested in Celesio’s European pre-wholesaling and contract sales businesses if they were available, according to its chief executive.

Celesio announced a radical shake-up of the drugs distributor last month to halt a slide in earnings.

“Celesio are currently going through a strategic review of their pre-wholesaling and contract sales businesses in Europe.

“They are both assets that, if they decide to sell, we would have an interest in looking at,” said United Drug’s chief executive Liam FitzGerald.

With health cuts forming a core part of Ireland’s austerity drive under an EU-IMF rescue package, United Drug is cutting almost a third of the 500 staff based in its domestic market and hopes further growth abroad would more than make up for contraction at home.

In addition to Europe, Mr FitzGerald reiterated that he was looking at acquisition opportunities in the US and Britain.

“We think we can accelerate that earnings growth in future with Ireland becoming less and less important in the mix.”

United Drug, a drugs and medical equipment supplier, said operating profit for the year to September 30 rose by 4% to €76.8 million with two-thirds of those profits made outside of Ireland, up from around 50% over two years ago.

Three analysts surveyed by Reuters expect operating profit to rise by 5% to €80.9m next year owing partly to a divestment of a British home care joint venture with Medco Health Solutions and favourable currency movements.

Mr FitzGerald said he was comfortable with that forecast. “It’d be a bit early to be calling it but certainly there would be some supportive fundamentals in the business that would give us confidence with the consensus at this point in time.”

The company said its adjusted pre-tax profits for the year rose by 1% to €68.5m, while 12 month revenues also increased by 1% to €1.75 billion.