Pretax profits up at United Drug

Health services provider United Drug has today reported pre-tax profits of €31.5 million for the six months to the end of March 2010, a five per cent increase on the €30 million recorded a year earlier.

Group revenue for the six-month period under review were flat at €853 million and the company said it expects pre-tax profit for the year to September 30th to be "broadly in line" with the prior year, excluding currency fluctuations.

The company said the strengthening of the euro against sterling and the dollar reduced reported profits by approximately €750,000.

Operating profits was unchanged at €35 million.

Fully diluted earnings per share before amortisation and the exceptional item is slightly ahead of 2009 at 10.68 cent per share.

An interim dividend of €2.34 cent per share has been declared, an increase of 5 per cent on the 2009 interim dividend.

The company said its healthcare supply chain division contributed revenues of €715 million, in line with the same period a year earlier.

Revenue for United's contract sales and marketing services division totalled €78 million, 2 per cent higher than the same period in 2009, while revenue from the packaging and speciality division was €60 million, a rise of 5 per cent on last year.

Net interest costs for the period of €3.52 million were €1.5 million lower than in 2009 as a result of a reduction in interest rates and the strong cash flow generated by the group.

Commenting on the results, United Drug chief executive Liam FitzGerald said the performance of the group in the first half of 2010 has been encouraging.

"Government budgetary pressures are resulting in constrained capital spending in hospitals and reductions in medicine pricing and reimbursement but they are also helping to drive an increased demand for efficient, cost effective outsourcing services," he said.