Uniphar reports big jump in profits but mixed outlook on Covid-19 crisis

Irish healthcare services company Uniphar which earlier this week reported a spike in demand due to the Covid-19 outbreak, has reported a 55 per cent jump in pre-tax profits for 2019.

The medical supplies group said profits before tax rose to 31.7 million last year as against 20.5 million in 2018 as revenues jumped by 17.4 per cent to 1.66 billion from 1.4 billion.

Uniphar reported earnings before interest, taxation, depreciation and amortisation (ebidta) of 48 million, up 49 per cent on the 32.2 million recorded a year earlier.

On Covid-19, the group said there had been “limited disruption” to its business so far.

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“We expect to continue to see increased volumes across the group, with likely increases in cost to serve as we invest in additional resources to manage significantly higher volumes, while at the same time dealing with reduced availability of manpower due to potential sick leave, self-isolation or quarantine situations arising.

However, the postponement of non-urgent elective surgeries means the companyexpects to take a hit in medical device revenues.

“Using currently available information, our best estimate of a three month disruption could result in a reduction of 2020 Ebitda in the region of €5 million,” the company said.

The group, which raised 139.4 million in net proceeds from its flotation last July, said strategic developments undertaken recently, which included the 24 million acquisition of Durbin, had positioned it to achieve its objective of doubling ebitda within five years of the listing.

The company said it intends to pay out a 2 million dividend covering the period from July to December 2019, subject to approval at its annual general meeting.

"We have achieved 56 per cent growth in reported gross profit, 7 per cent of which is organic. Our product access and commercial and clinical divisions continue to be the key growth engines for the group and for the first time contributed over 50 per cent of gross profit. Supply chain and retail saw strong volume growth outperforming the market," said chief executive Ger Rabbette.

“We continue to monitor and respond to Covid-19 developments, cognisant of the vital role Uniphar plays in the healthcare ecosystem, in terms of maintaining continuity in the supply and distribution of much needed medicines, medical devices and related services,” he added.

Shares in Uniphar jumped earlier in the week after the company said it was seeing increased demand across its business as the Government and healthcare industry ramps up preparations to deal with an expected surge in Covid-19 cases in the coming weeks.