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Interim Management Statement

7th Aug 2013 07:00

RNS Number : 0820L
United Drug PLC
07 August 2013
 



UNITED DRUG PLC

 

INTERIM MANAGEMENT STATEMENT

 

 

7 August 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 April 2013 to the date of this announcement.

 

Group revenues and profits before the non-recurring costs associated with acquisition activity and restructuring for the nine months to 30 June 2013 are ahead of the same period last year. International operations, particularly in the US, have performed strongly in the period as healthcare clients increasingly utilise our range of professional outsourced services.

 

 

Quarter to 30 June 2013

 

Trading across the Group has been strong during the quarter to 30 June 2013, with revenues and profits ahead of the same quarter last year.

 

SALES, MARKETING & MEDICAL

 

The division provides services including sales teams, tele-sales, market research, business intelligence, nurse educators, medical information, medical communications and event management to healthcare companies in 23 countries. It focuses on supporting healthcare professionals and patients at all stages of the product life cycle.

 

During the past year this division has expanded significantly both organically and through acquisition. All parts of the division have again traded strongly in this period.

 

Pharmexx was the most significant of these acquisitions in 2012 and it continues to trade well. Good progress is also being made with business development and margin improvement programmes, both of which will yield further benefits in future years. The planned restructuring programme within Pharmexx is largely complete and a major emphasis is now being placed on strengthening our market presence in each of the markets in which we now operate.

 

On 1 August 2013, the Group agreed the acquisition of Expansis, a Spanish contract sales organisation, for a total consideration of up to €12 million. Expansis is complementary to our Pharmexx Spain business and subject to acquisition approval from the Spanish competition authorities, it is intended to merge the two businesses.

 

The medical communications business has again been a particularly strong performer during the period, through a combination of new business wins and growth from existing clients.

 

HEALTHCARE SUPPLY CHAIN

 

The division provides logistics services to healthcare companies, pharmacies and hospitals in the UK and Ireland.

 

The wholesale businesses in the Republic of Ireland and Northern Ireland continue to trade well, and the automation project in the Dublin warehouse remains on target for completion in early FY2014. Following completion of the expansion programme in the Belfast facility, the Omagh warehouse has been closed and all activities centralised to Belfast.

 

The pre-wholesaling and medical and scientific businesses continue to perform well, with the focus over the past quarter being centred on the integration of recent business wins, which will enable these businesses to continue to grow their profits.

 

The pharmaceutical "specials" business in the UK continues to be significantly impacted by the introduction of a drug tariff on the most popular products in this market. Revenues and profits for this business are well below the same period last year. New business wins and cost containment measures, which are currently being implemented, will stabilise and strengthen this business.

 

PACKAGING & SPECIALTY

 

The division provides outsourced packaging and clinical trials materials services for healthcare manufacturers in the US and Europe. It also provides specialty homecare and distribution services in the UK and Ireland. The division designs and delivers solutions that meet clients' specific needs, whilst providing superior quality and full regulatory compliance.

 

The US packaging business, Sharp, continues to perform strongly. Business volumes continue to grow as healthcare clients are attracted by the high quality, bespoke outsourced services provided by Sharp. This volume growth is expected to be underpinned by a new requirement for all US and European prescription medicines to carry a unique serialisation number on their packaging by 2017. Work has commenced on a $20 million investment programme over three years to build further packaging capacity at our Allentown, Pennsylvania facility.

 

The closure of the UK packaging facility in Swindon and the transfer of clients to our other European facilities is progressing to plan. Although the European packaging business continues to trade behind last year, the combination of the UK closure, together with new business wins from existing US packaging clients is expected to deliver profit growth in 2014.

 

We have invested heavily in our Irish specialty homecare business as a result of winning a major Irish Government tender to provide infusion services in patients' homes. Profits in this business have been impacted by start-up costs and the slower than anticipated roll-out of this service, although it is now starting to reach expected activity levels.

 

 

Investment for future growth

 

We have continued to make significant investments in our information technology systems and to increase the efficiency and capacity of both our distribution and packaging businesses to enable these businesses to continue their growth.

 

The Group is holding an EGM on Friday 9 August to vote on a proposal to change the name of the Group to 'UDG Healthcare plc'. Subject to approval, it is expected that this change, when combined with the improved brand consistency within each division, will enable us to market our services more effectively to international healthcare companies.

 

The Group has also recently announced that Brendan McAtamney will join the Group as Chief Operating Officer in September. Brendan's multinational pharmaceutical experience will be extremely valuable in optimising operational performance and in expanding our sales of international outsourced healthcare solutions.

 

 

Long term debt funding

 

The Group is pleased to announce the agreement of a US$170 million (€131 million) private placement loan note issue, which is scheduled to be completed and drawn down in September. The notes have maturities of 10 and 12 years and a weighted average fixed annual interest rate of 3.7%. Half of the funds raised will be used to repay bank facilities and existing loan note maturities in 2014. The balance will be available to support the future growth of the Group.

 

 

Presentation currency

 

Following the Group's decision to list solely on the London Stock Exchange late last year, we have conducted a review to consider if the Group's results should also be presented in Pounds Sterling. Following this review, the Group has decided that based on existing and future geographic profit flows it will continue to use the Euro as its reporting currency.

 

 

Outlook

 

Based on the strong trading performance for the year to date and the outlook for the remainder of the year, the Group continues to expect 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. Average exchange rates since 1st April have been weaker than in the prior year, and if these continue, this may have a marginally negative impact on translated profit growth within this range.

 

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 8.30 AM (BST) today, 7 August 2013 to discuss this statement. The dial-in details are as follows:

 

Standard International Access: +44 (0) 20 3003 2666

UK Toll Free: 0808 109 0700

Ireland Toll Free: 1 800 930 488

Password: United Drug

 

A playback facility will be available shortly after the conference call ends for seven days on + 44(0) 20 8196 1480 (UK) or 00 353 (0) 1 486 4035 or +44 (0) 20 8196 1998 (International access). The access code for the replay will be 7972041

 

 

Analyst and Investor Site Visit

 

The Group is hosting a site visit to two of our sites in the East Midlands on Monday 9 September where we will showcase both our Ashfield Operation and our UniDrug pre-wholesaling facilities. We will also provide an introduction to each of these businesses, together with access to the wider divisional management teams. For more information please contact Powerscourt at the contact details below.

 

 

2013 Reporting Timetable

 

The Group will issue results for the year to 30 September 2013 on Thursday, 21 November 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 Giles Sanderson

Alan Ralph Lisa Kavanagh

United Drug plc Powerscourt

Tel: +353 1 4632300 Tel: +44 207 250 1446

 

 

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 US, UK, Ireland, Germany, the Netherlands and Belgium.

 

The Company 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 Company 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 Company also provides speciality distribution and homecare services in the UK and Ireland.

 

For more information go to www.united-drug.com. 

 

 

 

 

 

 

 

This information is provided by RNS
The company news service from the London Stock Exchange
 
END
 
 
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