12th Feb 2013 07:00
UNITED DRUG PLC
INTERIM MANAGEMENT STATEMENT
12 February 2013: United Drug plc ("United Drug" or "the Group"), a leading international provider of healthcare services, provides the following Interim Management Statement covering the period from 1 October 2012 to the date of this announcement.
Trading across the Group during the period has been strong. Group revenues and profits for the three months to 31 December 2012 are ahead of the same period last year. Much of this growth has come in our international operations with the businesses outside of Ireland contributing in excess of 70% of group profits.
During the 2012 financial year, the Group announced five acquisitions. Four of the five businesses acquired have now been fully integrated. Final competition clearance for the fifth, the acquisition of Pharmexx GmbH (a multi-country contract sales outsourcing business) was received in November 2012 and the acquisition completed on 20 November 2012. Since its completion the Group has been implementing a detailed integration plan to standardise processes and procedures in the acquired business. Pharmexx has traded ahead of expectations throughout this period. The integration is progressing satisfactorily and will result in some restructuring costs being incurred to bring further efficiencies.
Quarter to 31 December 2012
SALES, MARKETING & MEDICAL
The division provides sales, marketing and medical services to multinational healthcare companies. Trading during the period has been good with revenues and profits ahead of the same period last year.
During the 2012 financial year our sales and marketing proposition was expanded significantly both organically and through acquisition. As mentioned, the integration of Pharmexx is nearing completion while Watermeadow, Drug Safety Alliance and Synopia, are all trading in line with or ahead of expectations and have been successfully integrated into this division.
The last financial year also saw the establishment of a joint arrangement in Japan to provide contract sales outsourcing services in the second largest pharmaceutical market in the world. This business has already had a number of contract wins, facilitating break-even earlier than originally forecast. This reinforces our views of the potential for this market.
United Drug is now one of the leading global providers of sales, marketing and medical services to the healthcare industry. Today those services are provided to over 200 multinational companies in more than 20 countries employing in excess of 4,000 people.
HEALTHCARE SUPPLY CHAIN
The division provides distribution services to healthcare companies and pharmacies in the UK and Ireland, employing over 1,000 people. Trading during the period has been good with revenues and profits ahead of the same period last year.
In our wholesale business revenues and profits are ahead of the same period last year in both the Republic of Ireland and Northern Ireland. This is a result of continued market share gains, helping to offset austerity measures, combined with operating efficiencies driven by on-going cost saving initiatives. Investment in additional automation will help to drive further cost savings and enable us to service the markets more efficiently.
Our Medical & Scientific business continues to trade very strongly with revenues and profits well ahead of the same period last year. Recent new business wins, both in the UK and Ireland, should see this performance continue for the remainder of the financial year.
Our pharmaceutical "specials" business in the UK continues to be impacted by the introduction of a drug tariff on the most popular products in this market. Revenues and profits for this business are below the same period last year. The drug tariff was first introduced twelve months ago so its on-going impact is reducing and the tariff has helped to remove uncertainty from this market. This together with new revenue streams being developed means that the longer term outlook for this business remains positive.
PACKAGING & SPECIALTY
The division provides outsourced packaging and clinical trials materials services for healthcare manufacturers in the US and Europe, employing over 1,000 people. The division also provides speciality homecare and distribution services in the UK and Ireland. Trading during the period has been strong with revenues and profits ahead of the same period last year.
Our US commercial packaging business, Sharp, continues to trade strongly and win business in a market that is seeing an increased demand for top quality outsourced packaging services. Revenues and profits in the business for the period are well ahead of last year.
Our European commercial packaging business is trading behind last year. However, with a number of new business wins that will start contributing later in the year and a reduced cost base, the outlook for this business continues to be positive. The European business is in the process of being re-branded, to maximise cross-selling opportunities between the US and Europe and leverage the strong equity of our existing brand. At the same time we are reviewing the optimal infrastructure configuration required to support the long-term growth of the European business.
In August 2012 the Group acquired Bilcare Global Clinical Supplies. This business has now been re-branded Sharp Clinical and adds clinical trials packaging, logistics and supply chain management services to our commercial packaging offering. These businesses are highly complementary and the acquired business has been successfully integrated with our commercial packaging offering.
Outlook
Based on the strong trading performance for the year to date and the outlook for the remainder of the year, the Group expects constant currency adjusted diluted earnings per share for the year to 30 September 2013, before non-recurring costs associated with acquisition activity and restructuring, to be between 5% and 8% ahead of last year.
The Group also expects to deliver another strong cash flow performance in the year, which coupled with modest debt levels relative to earnings and significant financing facilities available leaves the Group well positioned to support its future growth objectives both organically and through acquisition.
Conference Call
United Drug will host a conference call for investors and analysts at 9.00am (BST) today, 12 February 2013 to discuss this statement. The dial-in details are as follows:
UK/International: +44 (0) 20 3003 2666
Republic of Ireland: +353 (0) 1 800 930 488
Access Code: 4058442
A playback facility will be available for seven days on +44 (0) 20 8196 1998 (UK) or 00 353 (0) 1 486 4035 (Republic of Ireland). The access code for the replay will be 4058442.
2013 Reporting Timetable
The Group will issue interim results for the six months to 31 March 2013 on Thursday 9 May, 2013.
Forward Looking Statements
This Statement contains certain forward-looking statements. They represent expectations for the Group's business, and involve risks and uncertainties. The Group has based these forward-looking statements on current expectations and projections about future events. The Group believes that expectations and assumptions with respect to these forward-looking statements are reasonable. However, because they involve known and unknown risks, uncertainties and other factors, which in some cases are beyond the Group's control, actual results or performance may differ materially from those expressed or implied by such forward-looking statements.
ENDS
For reference:
Liam FitzGerald Pauline McAlester Greg Lawless/Lisa Kavanagh
Barry McGrane Irish media UK media
United Drug plc Murray Consultants Powerscourt
Tel: +353-1-4632300 Tel: +353-1-4980300 Tel: + 44 (0) 7715 059 854
+44 (0)7872 604 889
About United Drug plc
Listed on the London Stock Exchange, United Drug is a leading international provider of services to healthcare manufacturers and pharmaceutical retailers, with operations in over 20 countries including the UK, Ireland, Germany, the Netherlands, Belgium, and the US.
The Group operates across three divisions, Sales, Marketing & Medical, Healthcare Supply Chain and Packaging & Specialty.
In the Sales, Marketing & Medical division United Drug is a global leader in the provision of contract sales outsourcing services to pharmaceutical manufacturers with operations in major markets including Continental Europe, the UK, North America and a presence in South America. United Drug also provides related marketing services to pharmaceutical manufacturers in many of these markets.
In Healthcare Supply Chain, United Drug is the largest pharmaceutical wholesaler in the island of Ireland. It is also the market leader in contract distribution outsourcing (pre-wholesaling) in Ireland and has achieved the No. 1 position in the UK through its joint venture business UniDrug Distribution Group (UDG). The Group provides specials medicines manufacturing and distribution services in the UK. Through its medical & scientific operations, United Drug provides sales & marketing and technical service solutions, including contract distribution services to a wide range of medical & scientific equipment & consumable manufacturers, with a market leading position in Ireland and the UK.
In the Packaging & Specialty division United Drug is a leading international provider of pharmaceutical contract packaging and clinical trials materials services with facilities in the US, UK, Dutch and Belgian markets. The Group also provides speciality distribution and homecare services in the UK and Ireland.
For more information go to www.united-drug.com.
Related Shares:
UDG.L