United Drug could spend €50m a year widening international footprint

United Drug, the expansion-focused Irish healthcare group, says it could comfortably spend €50m per year on acquisitions as it broadens its international footprint.

The Dublin-headquartered business, which last month delisted its shares from the Iseq in favour of the London exchange, is aiming to double its earnings by 2018 and increase its internationalisation. Already, 70% of group profits are generated outside of Ireland and by 2015 that figure is likely to have risen to 80%.

Yesterday, United issued a strong results covering the 12 months to the end of September. These showed group revenue up 5% to €1.83bn, a 10% rise in operating profits to €67.6m, and an 11% rise in pre-tax profits to €59m. Diluted earnings per share were up 11% to 19.89c and dividend per share rose 4% to 9.04c.

Group chief executive Liam FitzGerald said the €107m spent on international acquisitions this year, “position the business well for future growth”, but that mid-high single-digit percentage growth would still come from organic means.

Recent acquisitions such as that of Pharmexx, the former contract sales arm of German healthcare giant Celesio, have seen United Drug enter emerging markets such as Turkey and Brazil. Management has said the group needs to be operating in all major markets and provide services in emerging countries.

Mr Fitzgerald said: “We offer efficient outsourcing solutions for healthcare producers, providers, and patients across 22 countries.

“During 2012, we have significantly expanded our service offering and geographic footprint, delivered double-digit earnings growth and very strong operating cash flow.”

Each of the group’s divisions showed good growth in the past year — sales, marketing and medical revenue rose 7%, while healthcare supply sales rose 3%.