UDG Healthcare ups earnings forecast

UDG Healthcare has significantly upped its earnings forecast for its current financial year, on the back of a strong first-half showing.

The Dublin-headquartered diversified medical services group — previously known as United Drug — yesterday reported a solid set of first-half figures and said that, based on recent acquisition activity, underlying trading performance in the year to date and outlook for the remainder of the year, adjusted diluted earnings per share — for the 12 months to the end of next September — should rise by between 5% and 9%. UDG’s board had previously forecast earnings growth of between 2% and 5%.

Yesterday’s figures — covering the six months to the end of March — showed a 4% year-on-year increase (in constant currency terms) in adjusted operating profits to €45m, with first-half post-tax profits up by 3% to €30m. At just over €1.04bn, UDG’s first-half group revenues were ahead of the same period last year, by 3%.

“The first half of 2014 has been another period of substantial progress in the group’s evolution as a leading international healthcare services provider,” said CEO Liam FitzGerald.

UDG has begun to integrate its recent buy — UK company KnowledgePoint360 — into its wider healthcare communications division, Ashfield Commercial & Medical Services, which enjoyed a 36% annualised rise in operating profit and a 14% rise in revenues in the first half. The €105m takeover of KnowledgePoint 360 was UDG’s biggest to date and while another one of its size is unlikely in the near-term, the group — which has made eight acquisitions in the last couple of years — still has ample capacity to undertake smaller bolt-on purchases in the €10m-€20m bracket.

Goodbody Stockbrokers — which has a ‘buy’ tag on the London-listed UDG stock — heralded the performance as a “solid set of results”.