UDG reinstates dividend, guidance despite ongoing Covid-19 uncertainty

Company says third quarter saw drop in revenue as restrictions hit business

Healthcare services company UDG said the Covid-19 pandemic hit trading in the third quarter, but the group reinstated its interim dividend and financial guidance.

The group has suspended guidance and dividends in April, amid uncertainty around the impact of the coronavirus outbreak.

UDG said the first half of the year had been strong, but as expected, the pandemic restrictions had cut revenue in the period from April 1st to June 30th, with constant currency profit before tax for the quarter below the same period last year. Adjusted diluted earnings per share for the year to September 30th 2020 are expected to be between $0.43 and $0.45 cent. That assumes there will be no significant tightening of Covid-19 restrictions.

The company declared an interim dividend of $0.0446 per share, in line with 2019. The decision to pay a final dividend for the full year is under review.

Its Ashfield unit saw operating profit behind the same quarter last year, with in-field activities the most impacted by Covid-19. However, the company said the majority of its employees were serving clients remotely, through digital and technology solutions.

Sharp 's trading was strong during the three-month period, with operating profit significantly ahead of the same quarter last year. The unit completed the acquisition of a 25 per cent share in Massachusetts-based in Berkshire Sterile Manufacturing, investing $37.5 million.

In the nine months to June 30th 2020, profit before tax remained ahead of the prior year as the group felt the benefits of acquisitions completed in 2019, with modest underlying growth.

UDG's board also announced the appointment of independent non-executive director Shane Cooke as chair of UDG Healthcare, succeeding Peter Gray when he retires on September 30th.

Mr Gray, who has held the position for more than eight years, said he would step down in UDG’s annual report published in December 2019.

Mr Cooke joined the UDG Healthcare board in February last year and was appointed chair of the risk, investment and financing committee in January. He is currently a non-executive director of Nasdaq-listed Alkermes, and has also held roles as president of Alkermes, chief financial officer of Elan, head of Elan Drug Technologies, and chief executive of aviation leasing company Pembroke Capital.

UDG also announced the appointment of Ryan Quigley as chief operating officer of UDG Healthcare. He will take up the role on September 14th.