14th May 2014 11:28
LONDON (Alliance News) - UDG Healthcare PLC Wednesday raised its full year earnings per share guidance on the back of its recent acquisition of KnowledgePoint360 Group LLC, and raised its interim dividend after fiscal first-half profit rose at constant currency rates.
It raised its guidance for earnings per share in the year to September 30 to growth of between 5% and 9%, from its previous prediction of growth of between 2% and 5%. Excluding one-off re branding costs, its expects constant currency earnings per share growth to be between 9% and 13%. Its EPS in its last financial year was EUR11.76 cents, which was up 8% at constant currencies.
UDG acquired KnowledgePoint for EUR108 million in March.
The company posted a pretax profit of EUR17.2 million for the first half of its financial year to March 31, down slightly from EUR17.3 million in the year-earlier period. Revenue rose to GBP1.04 billion from GBP1.01 billion, but that was offset by acquisitions costs and an an exceptional charge of EUR12.2 million relating to the sale of its shareholding in Arjun Products Ltd, Craig & Haywards Ltd and The Specials Laboratory Holdings Ltd.
In the previous period, the company has posted exceptional costs of EUR10.5 million consisting of impairment charges, restructuring costs, onerous lease costs and legal costs.
Still, the healthcare services company said it will pay an interim dividend of EUR2.69 cents, up from EUR2.61 cents in the previous year.
UDG's Ashfield Commercial & Medical Services business saw revenue rise 14%, driven by strong growth in North America thanks to demand for its combined field and phone nurse-led patient support service. Including acquisitions, operating profit in the business rose 36%.
The company expects this businesses to become its largest operating profit contributor in 2014, as it integrates KnowledgePoint and its healthcare communications and Japanese businesses continue to grow.
Oprerating profit in its supply chain services division dropped 8% in the first half of the financial year, although it was only down 2% excluding the Specials businesses it disposed of in February.
Within this division, its United Drug Wholesale business saw a small rise in revenue as market share gains offset ongoing regulatory changes that are bringing in lower generic medicine pricing. It expects this to have an increasing impact on revenue going forward, although this will not translate as much to profit due to its margin model for generic medicines.
Its Aquilant Medical & Scientific business continued to see strong sales growth, although profits reduced slightly as it sold less higher margin products.
Operating profit in its Share Packaging Services business fell 19%, as sales got off to a slower start to the year and it closed its UK commercial packaging business.
The company said that despite the decline in revenue and profit in this division, its sales pipeline has increased, driven by the "Drug Quality and Security Act" brought in by US President Barrack Obama in November, 2013.
The act will require medicine packages to be replaced by packaging with a unique serial number by November 2017, and it has invested in its capacity and staff ahead of this change. Although this will hit profits in 2014, however, it expects to see revenue and profit increase from 2015 onwards.
"On the back of the strong underlying trading performance we remain positive about our future growth prospects," said Chief Executive Liam FitzGerald.
Shares in UDG Healthcare were trading up 2% at 367.20 pence Wednesday morning.
By Hana Stewart-Smith; [email protected]; @HanaSSAllNews
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