Profits at United Drug lower than expected

HEALTHCARE SERVICES group United Drug says it expects profits for the year to the end of September to be lower than forecast, due to a fall in the value of sterling against the euro.

The company said, however, that profits were expected to be ahead on a constant currency basis.

In a trading update yesterday, United Drug, which distributes medicines and equipment to hospitals and pharmacies in the Republic, Britain and the US, said it experienced a 15 per cent fall in the value of sterling relative to the euro during the past trading year.

Full-year fiscal results will be affected by a once-off exceptional charge this year of approximately €14 million due to the group’s restructuring and cost-reduction plan, which is expected to deliver annualised savings of up to €10 million.

The firm said that while some business divisions had experienced “very buoyant trading” during the year, others had faced more challenging conditions.

United Drug said its healthcare supply chain division would see overall profits below those reported last year due to reduced consumer and hospital spending and currency fluctuations. Profits at its contract sales and marketing services division are expected to be well ahead of those in the prior year, the company said.

United’s packaging and speciality division is expected to report profits in line with those of the previous year on a constant current basis. The company said it remained positive, had a strong balance sheet and good internally generated cash flows to support growth objectives.