Uniphar chalks up organic gross profit growth of 5% in first half

Irish-listed healthcare group says it traded in line with expectations during the first half of year

Irish-listed healthcare group Uniphar has said it traded in line with expectations during the first six months of the year, while it achieved organic gross profit growth of about 5 per cent.

The company, which accounts for more than a fifth of the retail pharmacy market in the Republic, is an international business that services the requirements of more than 200 multinational pharmaceutical and medical technology manufacturers.

It announced details of an unaudited trading update for the six months ended June 30th on Tuesday.

The business performed “in line with the group’s expectations” in terms of both gross profit and earnings before interest, taxes, depreciation and amortisation level (Ebitda), while it also delivered normalised free cash flow conversion “in line with medium-term guidance”.

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The company described the performance as “strong” and “demonstrating resilience” in the face of continued macroeconomic uncertainty and inflationary pressures. It continues to maintain “a strong liquidity position”.

The group achieved organic gross profit growth of about 5 per cent, “against a strong comparative period”. This was driven by organic growth across each division and an outperformance in its supply chain and retail division.

An analyst with Davy said the update represented “an excellent result” given the inflationary backdrop and a particularly strong performance last year.

Uniphar said it remained focused on its strategy of building a pan-European presence in its commercial and clinical division, and progressed the integration of three acquisitions made in 2021.

Despite the strong comparative period in the first half of 2021, the group achieved mid-single-digit organic growth in gross profit in the division. It is targeting mid-single-digit organic growth in gross profit in this area in the medium term.

Elsewhere, Uniphar’s product access division also delivered mid-single-digit organic growth in gross profit despite challenges posed by the Covid-19 pandemic, with a similar expectation for the full year.

The group is targeting double-digit organic growth in gross profit in this division in the medium term.

Supply chain

The supply chain and retail division “performed strongly” during the period and “once again outperformed its medium term organic gross profit growth guidance”. The group is targeting low-single-digit organic growth in gross profit in this division in the medium term.

In terms of outlook, Uniphar said it “remains confident in delivering on current year expectations at a group level”. Mergers and acquisitions “will continue to play an important part” in its growth strategy.

“The group continues to maintain a disciplined approach to capital allocation while managing an active pipeline of acquisition opportunities across all divisions and a number of geographies to further enhance the group’s growth potential,” it said.

Uniphar chief executive Ger Rabbette said the group “performed strongly” during the period.

“The resilience of our business model and the diversity of our product offering has once again been demonstrated, with each division delivering organic growth in gross profit during the period,” he said.

“Once again, our supply chain and retail division has outperformed its medium-term guidance, demonstrating the benefits of our market-leading position and the importance of continued investment in this division.

“While the macroeconomic environment remains uncertain, we have been successful in using our scale and deep relationships with our long-term partners to mitigate inflationary headwinds.

“We remain confident and are on track to achieve our strategic objective of doubling Ebitda within five years of IPO.” The group expects to publish its interim results for the period on August 30th.

Colin Gleeson

Colin Gleeson

Colin Gleeson is an Irish Times reporter