PHARMACEUTICAL grouping United Drug, a believer in advance financial planning, this week announced a rights issue to raise £12.4 million with the objective of part-funding a major acquisition, financing capital expenditure and reducing bank debt. The issue is pitched on the basis of one new share for every four held at a discounted price of 290p. United Drug is talking in terms of an acquisition costing up to £20 million. Although no specific target has been identified, it is thought that management could use British pharmaceutical distributor UniDrug as a vehicle for its planned expansion in Britain. UniDrug is a joint venture operation between United Drug and Unichem.
Jerry Liston, United Drug's chief executive says management believes it is prudent to have the financing in place now "and gear up later when an acquisition comes along".
Accompanying the rights issue news came trading results showing a 19 per cent rise in annual profits last year to £6 million. The current year has started well with a continuance of "very strong" growth trends. With earnings per share improving 18 per cent to 22.46p shareholders receive a final dividend of 9p a share.
