FAVOURABLE economic conditions helped pretax profits at United Drug improve 17 per cent to 2.7 million in the six mouths to end March. The group claims to have increased its share of the pharmaceutical and agency distribution markets in the Republic and Northern Ireland.

Eight months into its current financial year chairman Mr Martin Rafferty said he was confident the group will have another record bear in terms of turnover, profit, earning per share and dividend". Trading continues to be satisfactory, he said.

Turnover rose by 16 per cent to £119.8 million, with operating margins up to 2.54 per cent from 2.48 per cent. With a 15.7 per cent rise in earnings per share to 10.09p the board has increased the interim dividend by 10 per cent to 2.8p per share. Shareholders will be able to take their dividend in the form of cash or new shares in the company.

Turnover and profits improved at all three divisions pharmaceutical, consumer product and medical and scientific.

Sales of pharmaceuticals into the retail market increased 12 per cent compared with overall market growth of 10.9 per cent, according to Mr Rafferty.

Sales at the Sangers wholesale pharmaceutical and agency distribution operation in Northern Ireland rose 20 per cent while profits increased 26 per cent.

Higher business levels led to an increased working capital requirement which, along with investment in new computers, produced a fall in group cash levels. While the balance sheet showed a strong rise in creditors, chief executive Mr Jerry Liston said the period of credit allowed by suppliers fell from 73 to 71 days.

Profit after tax was 19 per cent higher at £1.8 million. After payment of the interim dividend, profits of £1.67 million were retained.