UDG Healthcare to vaccinate staff as profits climb 7%

Dublin-based pharmaceutical company had expected to take a hit in second half of 2020

UDG chief executive Brendan McAtamney is “pleased” with the results, which were ahead of guidance.

UDG chief executive Brendan McAtamney is “pleased” with the results, which were ahead of guidance.

 

Dublin-based healthcare services company UDG Healthcare will move quickly to secure Covid-19 vaccinations for its staff, after it beat analysts’ expectations in its full-year results despite being in the teeth of the pandemic for much of the year, its chief executive has said.

The company, which has published its results for the year ended September 30th, 2020, employs about 9,000 people in 29 countries.

UDG chief executive Brendan McAtamney said about one-third of his staff are deemed essential workers. “From a business perspective, from April 1st onwards we should be in a better place because a lot of the vaccinations will have begun.”

“It looks like the efficacy rates are very high and the safety is very good. It’s really about getting the vaccines to our staff now.

“About 3,000 of our 9,000 are deemed essential, frontline workers, packaging pharmaceuticals and shipping them to distribution centres and retail outlets. We obviously want to get them vaccinated as soon as possible.”

Mr McAtamney said 84 per cent of his “in the field” staff are back working, while staff that had their salaries cut have returned to full pay. The company was forced to lay off about 200 people worldwide, however.

Pharmaceutical packaging

About two-thirds of UDG’s operating profit is generated by its Ashfield division, which offers advisory, communications, commercial and clinical services. The remainder of the UDG’s operating profit is generated by its Sharp division, which deals in pharmaceutical packaging.

It said it achieved revenue of just under $1.3 billion (€1.1 billion) in the year, which was 1 per cent behind 2019. Revenue from its Ashfield division, which has been hit hardest by the pandemic, decreased by 6 per cent, but this was compensated for at Sharp where revenue increased by 11 per cent.

Group net revenue was 5 per cent ahead of 2019 and net revenue on an underlying basis was 1 per cent ahead, excluding the impact of foreign exchange, acquisitions and disposals.

Its adjusted operating profit of $165.3 million was 7 per cent ahead of 2019. The adjusted net operating margin for the businesses for the year was 14.3 per cent, ahead of 14 per cent in 2019.

Net interest costs and pre-exceptional items of $13.3 million were higher than 2019. Interest income was also impacted by lower interest income on US cash deposits. This delivered an adjusted profit before tax of $152 million.

The group incurred an exceptional loss of $2.7 million after tax in the year. A charge of $8.1 million, net of tax, was incurred in relation to restructuring of Ashfield’s operations due to market conditions arising from the Covid-19 pandemic.

Interim dividend

This was primarily within the meetings and events business and the Stem business. The charge primarily related to redundancy.

The company said it “retains a robust financial position with a strong balance sheet and liquidity profile”. It also has access to fully committed undrawn debt facilities of $246 million.

In August, the board declared an interim dividend of 4.46 cent per share relating to the first half of the year which had not been impacted by the pandemic. This was in line with the 2019 interim dividend.

The board has now proposed a 1.6 per cent increase in final dividend to 12.54 cent per share, yielding a full year dividend increase of 1.2 per cent to 17 cent per share.

From April until July, UDG accessed government support in light of Covid-19 related uncertainty. It said it has now repaid any specific government support related to the Covid-19 pandemic.

In terms of outlook, UDG said it “remains a strong and well-diversified business, supported by excellent long-term fundamentals, as evidenced by the strong financial performance in the full year”.

“While some parts of Ashfield continue to be impacted by the pandemic, the group’s resilient business model leaves UDG Healthcare well-positioned for continued future growth,” it added.