UDG Healthcare’s revenue up 11% to €2bn

Diversified healthcare services group UDG Healthcare is confident of maintaining recent growth momentum after delivering figures at the top end of its guidance range for its latest financial year.

The Dublin-headquartered group — up until recently known as United Drug — yesterday posted an 11% jump in group revenue, for the 12 months to the end of September, to just over €2bn, with adjusted operating profit up 13% to just over €95m and pre-tax profits rising by 8% to €81.8m. The delivery of 7% diluted earnings per share growth aided a higher than anticipated dividend of 9.56c (up 6%).

While positive currency movements helped the results, UDG Healthcare saw revenue increases across each of its key divisions. The group spent over €80m on acquisitions, mainly in the growing contract sales outsourcing (CSO) unit. Revenue, in the overall sales/marketing and medical division (which now accounts for a third of group profits) grew by 74% to nearly €372m, while operating profit was up by 55% to €31.8m.

Following recent acquisitions in mainland Europe and North America, UDG Healthcare is now a market leader in the CSO sector in Canada, Spain, Portugal, Austria, Scandinavia, Britain and Ireland, and holds a strong position in Germany. The year also saw significant growth in the US, which now contributes 34% of group profit.

Marginal growth was evident in the healthcare supply chain business — which incorporates UDG Healthcare’s Irish operations, but its packaging unit grew revenue by over 20% and profits by 11%.

Group chief executive Liam FitzGerald heralded a year of “substantial progress” and said that the group remains on course to meet its stated target of generating 80% of annual earnings from overseas operations by 2015. With acquisitions supporting UDG Healthcare’s international growth, he said management expects the momentum seen in the last couple of years to continue.

But Mr FitzGerald also stressed the importance of UDG Healthcare’s Irish operations — which also saw revenue growth in the year — noting it is outperforming the larger drug wholesale market here and grew market share by 3% in the 12 months to the end of September; adding that management will continue to invest heavily at home.