UDG has ‘good start’ to 2019, expects earnings per share to rise up to 6%

Underlying growth and acquisitions responsible for strong performance, company says

Photograph: David Sleator/The Irish Times

Photograph: David Sleator/The Irish Times

 

Irish healthcare service provider UDG said it expects earnings per share to grow by up to 6 per cent given its “good start” to the financial year.

Dublin-headquartered UDG, which comprises two business arms – Sharp and Ashfield – said profit before tax for the first quarter was “well ahead of the same quarter last year” on a constant currency basis and in line with previously communicated expectations.

Good underlying growth and acquisitions completed last year were responsible for the performance, the company said in a trading update for the three months ending on December 31st 2018.

The communications and advisory arm of Ashfield - which accounts for two-thirds of UDG’s profits - were outperforming the same period last year, while the commercial and clinical division reported “good momentum in the US”.

Its other division, Sharp, which provides contract packaging services, reported operating profit that was “significantly ahead of the same quarter last year”, reflecting both strong US momentum and a weak comparative period in 2018.

London-listed UDG said earnings per share for the year ending September 31st would rise by between 4 per cent and 6 per cent on last year’s earnings of $45.9 (€40.12) on an adjusted diluted constant currency basis.

“The group’s strong balance sheet leaves it well placed to make further strategic acquisitions as those opportunities arise, complementing its continued underlying profit growth,” the company said.

This quarter marks the first with no mention of the previously owned Aquilant division which UDG disposed of last year. The disposal followed a currency impact as a result of Brexit and two big client losses.

The sale of the Aquilant business formed part of the group’s strategy to exit its lower-margin distribution business, having sold the United Drug supply chain business to McKesson in April 2016.