Preliminary Results

UDG Healthcare plc

Preliminary Announcement of Results

Year ended 30 September 2014

UDG Healthcare plc ("UDG Healthcare" or "Group"), a leading international healthcare services provider, announces its preliminary results for the year ended 30 September 2014, after another year of substantial progress for the Group.

* On a constant currency basis, the increase in diluted earnings per share over 2013 is also 8%.

**Amortisation of acquired intangible assets, acquisition costs and net exceptional items gain.

*** 2013 comparatives have been re-stated in accordance with IAS19: Employee Benefits (Revised).

**** EBITDA before acquisition costs and net exceptional items gain including annualised EBITDA of companies acquired and less EBITDA of those disposed of during the year. 

UDG Healthcare plc believes that adjusted operating profit, adjusted profit after tax and adjusted diluted earnings per share are more appropriate measures of the underlying Group performance than those measurements set out in the primary financial statements, as this information is in a format communicated to and reviewed by the investment community.

· Adjusted operating profit growth of 9% in the year.

· Adjusted diluted earnings per share (EPS) increased by 8%.

· Net debt/EBITDA reduced from 2.13 times to 1.89 times.

· Proposed 7% increase in final dividend to 7.43 cent per share, giving a total dividend for the year of 10.12 cent per share, a 6% increase on 2013.

· Very strong growth continued in the Ashfield Commercial & Medical Services division, with operating profits up 32% in the year, including acquisitions.

· Ashfield became a global leader in healthcare communications with the acquisition of KnowledgePoint360 (€106 million) and Galliard (€16 million).

· Operating profit in the Sharp Packaging Services division increased 22% on the prior year, as the European business made a modest profit in the year.

· Significant capacity expansion initiated for Sharp US.

· Disposal of 50% interest in UniDrug to our joint venture partner Alliance Boots for €82.4 million and disposal of the Specials businesses for €27.4 million. Both disposals will enable greater focus on developing the Group's core businesses.

· Organic growth and acquisitions resulted in the Ashfield Commercial & Medical Services division becoming the Group's largest operating profit division in 2014.

Commenting on the 2014 performance, UDG Healthcare plc Chief Executive Officer, Liam FitzGerald said:

"2014 has been another year of substantial progress for the Group. Operating profit increased by 9%, EPS was 8% ahead of the prior year and our dividend has increased by 6%. This dividend increase continues our 25 year history of consistent dividend growth.

Following the successful integration of KnowledgePoint360 and Galliard, Ashfield Healthcare Communications is now a leading global healthcare communications business . Across the Group we have strong market positions and are well positioned to benefit from the growth in outsourcing throughout the healthcare industry as companies react to rapidly changing business requirements.

Analyst presentation:

A presentation for investors and analysts will be held in London at 9.00 GMT, today Thursday 20 November. If you wish to attend please contact Powerscourt below. Alternatively, to dial into the presentation, the details are as follows: - Standard International Access +44 (0) 20 3003 2666 - UK Toll Free 0808 109 0700 - Password: UDG Healthcare.

For reference:

Investors and Analysts:

Liam FitzGerald, CEO

Alan Ralph, CFO

David Marshall, Head of Investor Relations

UDG Healthcare plc

Tel: +353-1-463-2300

Media:

Greg Lawless / Lisa Kavanagh

Powerscourt

Tel: +44-207-250-1446

About UDG Healthcare plc:

Listed on the London Stock Exchange, UDG Healthcare plc is a leading international provider of services to healthcare manufacturers and pharmacies, with operations in 20 countries including the US, UK, Ireland and Germany.

UDG Healthcare plc operates across three divisions: Ashfield Commercial & Medical Services, Supply Chain Services and Sharp Packaging Services.

Ashfield Commercial and Medical Services is a global leader in the provision of outsourced multi-channel communications to healthcare professionals and patients. Ashfield has operations in major markets including continental Europe, the UK, North America and a presence in South America and Asia. The division provides sales teams, telesales, nurse educators, medical information, healthcare communications and event management services to healthcare companies in 19 countries. It focuses on supporting healthcare professionals and patients at all stages of the product life cycle.

Supply Chain Services includes the United Drug Supply Chain Services and the Aquilant Specialist Healthcare Services businesses. The division provides logistics services to healthcare companies, pharmacies and hospitals in the UK and Ireland. United Drug Supply Chain Services is the largest pharmaceutical wholesaler and pre-wholesaler on the island of Ireland. Aquilant Specialist Healthcare Services is a leading provider of outsourced sales, marketing, distribution and engineering services to the medical and scientific sectors in Ireland and the UK.

Sharp Packaging Services is a leading international provider of pharmaceutical contract packaging and clinical trials materials services with facilities in the US, UK, the Netherlands and Belgium.

For more information go to: www.udghealthcare.com

Ashfield Commercial & Medical Services

Ashfield delivered a very strong performance in 2014 with revenue up 27% to €496.7 million and operating profit 32% ahead of the prior year at €43.3 million, with profits increasing across all geographies. The business benefitted from acquisitions and delivered good organic profit growth in the year. Operating margins of 8.7% were slightly up on the prior year.

Ashfield UK saw a strong increase in profits primarily due to the impact of acquisitions. In Europe, the integration of Pharmexx has progressed well with profits ahead of the prior year as operating margins expanded. We now have a market leading CSO position in eight European countries. The increased geographic presence across Europe has begun to deliver new pan-European business opportunities.

All our businesses in North America performed very strongly with profits significantly ahead of the prior year. Acquisitions contributed in the year, while higher margin Medical Services activities performed strongly, some of which was due to a number of one-off projects.

Our Japanese greenfield business, in collaboration with our local partner CMIC, exceeded our expectations of breakeven and generated a profit of €0.8 million in the year. Following this success with CMIC, we agreed to formalise our relationship and merged our respective CSO businesses into a new joint venture company on 1 October 2014.

In February 2014, all of the businesses in the division were rebranded under the Ashfield name. This has significantly benefited the division as we reduced from twelve brands at the beginning of the year to a single Ashfield brand. We believe this will facilitate more effective cross-selling with improved customer visibility of the scale of capabilities and geographic reach within the division.

During the year we significantly strengthened our existing offering in healthcare communications with the acquisition of KnowledgePoint360 (KP360) in March and Galliard in July. Following these acquisitions, Ashfield Healthcare Communications now accounts for approximately 40% of the profits of the Ashfield Division. It is also one of the largest healthcare communications businesses in this fragmented global market. The additional digital and scientific expertise gained through these acquisitions has been very beneficial to the other Ashfield businesses in further developing new commercial offerings.

We continue to experience strong demand for our multi-channel (CSO, nursing and call-centre) services across all geographies and particularly in the US, as the increasing importance of biotech and specialty product drives demand for such a multi-channel marketing approach.

Supply Chain Services

The Supply Chain Services division delivered a solid overall performance, as disposals and market conditions impacted the financial performance. Revenues of €1.45 billion and profits of €40.2 million were 2% and 13% lower, respectively. The disposal of our Specials businesses in February and the sale of our 50% share in UniDrug in August accounted for over half of the year-on-year decline in profits.

Revenues in our wholesale business were below the prior year. Whilst we continued to increase our market share of wholesale in the Republic of Ireland, the overall value of the market declined due to Government led medicine price reductions. Operating profits were lower in the wholesale business in the year, due to a combination of the introduction of generic reference pricing and, in particular, the switch by manufacturers of high-tech medicines to a "direct to pharmacy" model. These developments had a stronger impact in the second half of the year. In Northern Ireland, our wholesale business hada good performance, benefiting from a stable price environment.

The Irish pre-wholesale business also had a good performance with revenues and profits ahead of the prior year.

We have invested significantly in creating future efficiencies in wholesale and pre-wholesale through both increased automation (completed in first half 2014) and the introduction of a new ERP IT system, which will be completed in late 2015. These investments will facilitate reduced operating costs and should enable us to increase our cost efficiency and consequently our market share as the pricing environment in Ireland normalises in future years.

Aquilant achieved strong revenue growth in the year and also increased operating profit. Margins were lower due to a change in the sales mix towards larger contracts in 2014.

We disposed of our Specials business in February for €27.4 million, allowing us to focus on our core service offerings. In August, we also disposed of our 50% interest in UniDrug to our joint venture partner Alliance Boots for €82.4 million. These disposals generated a net profit on disposal of €56.6 million and released €109.8 million to both reduce debt and enable further investment.

Sharp Packaging Services

Sharp Packaging Services performed very well in 2014 with revenues of €178.6 million and profits of €19.1 million, 7% and 22% ahead of the prior year respectively. Operating margins moved from 9.4% to 10.7% in the year.

Sharp US revenues were 8% ahead of the prior year, while profits of €19 million were 4% behind (flat on a constant currency basis). The lower profit margin is mainly due to additional costs resulting from poor weather in the first half and additional investment in serialisation. The second half profit was over 50% ahead of the first half of 2014 and there is good momentum across the business as we move into 2015.

Sharp Europe made good progress across both clinical and commercial and the business made a modest operating profit. This is a significant improvement on the loss of €4 million in 2013.

We have begun to offer serialisation services in Europe and can now provide a more consistent global packaging service to pharmaceutical manufacturers for both clinical and commercial needs. The re-branding of the European packaging operations under the Sharp brand is having a positive impact as more Sharp US customers are beginning to utilise our European packaging capabilities.

Serialisation of prescription products will be mandatory from November 2017 in the US. We expect it to be a driver of future growth in the packaging industry and therefore we continue to invest in our serialisation capabilities across the Sharp business.

We continue to add further capacity to our packaging facilities in the US to meet the increasing demand in this market. The first phase of the current capacity expansion programme at our Allentown facility in Pennsylvania was completed earlier this year and provides 10% extra capacity. A second phase of expansion, which will add an additional 25% to our US capacity, will become operational in 2016 with an anticipated investment cost of €35 million.

Group development and outlook

2014 has been another year of substantial progress for the Group with operating profit increasing by 9% and EPS ahead by 8%. The full year dividend increased by 6% continuing our 25 year history of consistent dividend growth.

UDG Healthcare plc continues to develop and grow our service offering to international healthcare clients. Across the Group we have leading market positions and are well positioned to benefit from the strong growth in outsourcing across the global healthcare industry.

The re-branding of our business units during the year has been well received by clients and the improved visibility of the scale of capabilities and geographic reach will facilitate more effective cross-selling, both within and across the divisions. To support our operations across 20 countries we are making significant investments in our information technology systems and are broadening our management capability and expertise across the Group as we expand. We also continue to improve and streamline the structures across the Group's divisions to sustain efficiencies.

During the year we enhanced our existing offering in healthcare communications with the acquisition of KP360 in March and Galliard in July. Ashfield Healthcare Communications is now one of the largest healthcare communications businesses in this fragmented global market. The Sharp Packaging Services division had another very good year and we are adding significant capacity to our packaging facilities in the US, through a €35 million capital expenditure investment.

The disposals of Specials and UniDrug generated a net gain of €56.6 million which along with the release of deferred contingent earn-out payments of €8.2 million and impairments to goodwill and intangible assets of €10.7 million, resulted in the recording of a net exceptional gain of €54.1 million in the year.

In September 2014, the Group concluded an updated senior bank revolving credit facility of €210 million on improved terms. Following this re-financing and the issuance of a €131 million long term private placement loan note in September 2013, the Group now has committed facilities of €503 million, of which over 80% has a maturity date of five years or longer. These credit facilities coupled with existing cash balances ensure that the Group has considerable long-term financing facilities available to support our growth objectives.

The composition of the Group's operations changed significantly during 2014. Looking ahead to 2015 the Ashfield division is expected to represent approximately 50% of Group profits, the Supply Chain Services division will represent 30%, with approximately 20% from the Sharp division. The Group expects to achieve operating profit growth in 2015 as the strong growth trend in Ashfield and Sharp, which will account for approximately 70% of the Group profits in 2015, more than offsets the anticipated decline in the Supply Chain Services division. We remain very positive about our future growth prospects.

Board Changes 

Gary McGann and John Peter have announced their intention to retire from the Board of UDG Healthcare, having served for ten years and nine years, respectively. Gary is stepping down from the Board and as a member of the Risk, Acquisitions & Finance Committee with immediate effect.

John will continue as a director, chairman of the Remuneration Committee and as a member of the Audit Committee, until the conclusion of the Company's Annual General Meeting, to be held on 3 February 2015. In anticipation of John's retirement, Linda Wilding has been appointed to the Remuneration Committee and Gerard van Odijk has been appointed to the Audit Committee. Upon John's retirement, Linda Wilding will become the chairperson of the Remuneration Committee.

Chairman Peter Gray commented: "I would like to take this opportunity to thank both Gary and John for their significant contribution to the Board of UDG Healthcare during a period of major evolution and wish them both well for the future."

Forward-looking information

Some statements in this announcement are forward looking. 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.

Overview of results

Operating profit, before acquisition costs, net exceptional gain, and the amortisation of acquired intangible assets, was 9% ahead of 2013 at €102.6 million. Profit after tax, on the same basis, was also 9% ahead. Diluted EPS was 8% ahead at 28.77 cent.

Revenue

Revenue for the year was 5% ahead of 2013 at €2.13 billion. The Ashfield Commercial and Medical Services division reported revenue 27% ahead of the prior year and the Sharp Packaging Services division reported revenue 7% ahead of the prior year. Supply Chain Services revenue was 2% down on 2013.

Adjusted operating profit

*2013 comparatives have been re-stated in accordance with IAS19: Employee Benefits (Revised).

Operating profit for the year of €102.6 million was 9% higher than in 2013. The impact of foreign exchange rates on the translation of non-euro profits reduced throughout the year. At the half year it reduced profits by 2%, whilst for the full year it had less than 1% of a negative impact.

Intangible amortisation on acquired intangibles

The amortisation charge on acquired intangible assets for the year was €13.8 million.

Acquisitions

The Group completed the acquisition of MCG, KP360, Galliard and The Travel Clinic during the year. The net cash outflow on these acquisitions was €114.6 million with deferred contingent consideration payable of €7.0 million. The net assets acquired with these acquisitions were €63.5 million with goodwill of €58.1 million.

Costs of €1.9 million were incurred on the acquisition activity undertaken during the year. These costs were primarily professional fees for due diligence, legal negotiations and contracts. These costs are shown separately on the Group income statement.

Net exceptional gain

The Group generated an exceptional profit on disposal of joint ventures of €68.7 million in the year. On 18 August 2014, the Group disposed of its 50% shareholding in UniDrug to Alliance Boots for a consideration of €82.4 million. The carrying value of the joint venture on disposal was €11.3 million and the related disposal costs were €0.6 million. In addition net foreign currency translation losses previously recognised in the foreign currency translation reserve of €1.9 million were reclassified to the income statement.

On 28 February 2014, the Group disposed of its shareholding in its subsidiaries Arjun Products Limited, Craig & Hayward Limited and The Specials Laboratory Holdings Limited ("Specials"). The loss on disposal arising was €12.1 million. This amount included goodwill and intangible assets net of deferred tax ascribed to these businesses of €32 million and related disposal costs of €0.4 million. Net assets on disposal were €6.6 million. In addition, net foreign currency translation losses previously recognised in the foreign currency translation reserve of €0.4 million were reclassified to the Income Statement.  Total consideration (net of cash disposed) was €27.4 million.

Deferred contingent consideration of €8.2 million in respect of prior year acquisitions was released in the current year following a review of earn out targets.

Impairment of goodwill and intangibles arose during the current year as the Group reduced the carrying value of goodwill and intangibles in relation to Pharmaceutical Trade Services, Inc., and MASTA Limited. The non-cash goodwill and intangibles impairment charge of €10.7 million arose from a review of the value in use calculations at 30 September 2014.

Adjusted operating profit by division

* 2013 comparatives have been restated in accordance with IAS19: Employee Benefits (Revised). The 2013 comparatives have also been re-stated to reflect the divisional split following the rebranding concluded at the end of September 2013 and the consequent transfer of the TCP Homecare and MASTA businesses from Sharp Packaging Division to Supply Chain Services and Ashfield Commercial & Medical Services Divisions respectively

Adjusted operating margin

Adjusted operating margin for the year of 4.82% was higher than the margin of 4.65% in 2013. The Group is committed to increasing its operating margin as a key strategic target. This is achieved via operating efficiencies and the impact of acquisitions with higher operating margins.

Adjusted profit before tax

Net interest costs for the year of €16 million were 15% higher than in 2013. Private placement funding that was put in place in late 2013 was utilised on the acquisition of KP360 in March. The proceeds from the sale of UniDrug in August have not had a significant impact on interest costs in 2014.

Adjusted profit after tax

Profit after tax of €70.0 million was 9% higher than in 2013. The effective rate of tax was 19.2% which is lower than the 2013 rate of 20.2%.

Adjusted diluted earnings per share

Earnings per share for the year were 8% ahead of 2013 at 28.77 cent. Constant currency growth was also 8% as the translation of non-euro profits had a negative impact of less than 1%. Further details on the primary exchange rates used are provided in note 17.

Cash flow

Net cash inflow from operating activities in 2014 was €63.7 million. The Group invested €38.1 million in capital expenditure during the year, mainly relating to the ERP system in the Republic of Ireland and increased automation in both Sharp and United Drug (ROI). There was an outflow of €8.5 million during 2014 related to exceptional items incurred during 2013.

The net cash outflow from acquisitions completed during the year was €114.6 million whilst €7.6 million was paid out in deferred contingent consideration in relation to acquisitions from previous years. €109.8 million was generated from the sale of Specials and UniDrug during the year.

Balance sheet

Year end net debt was €246.4 million. The net debt to EBITDA ratio was 1.89 times and interest expense was covered 8.6 times by EBITDA. Financial covenants in our principal debt facilities are based on net debt to EBITDA being less than 3.5 times and EBITDA interest cover being greater than three times.

Long term funding

In September 2014, the Group concluded an updated senior bank revolving credit facility with our existing banking partners on improved terms. The updated five year facility allows the Group to draw down borrowings of up to €210 million. At 30 September 2014, €125.8 million had been drawn under the facility.

To diversify our funding resources further, we also entered into a private placement note purchase agreement. This allows us to issue loan notes for up to $75 million over a three year period with a maturity of up to 12 years. In September, the Group completed the issue of €10 million of these notes at a fixed interest rate of 2.65%. These funds were used to repay existing borrowings.

The updated senior bank revolving credit facility coupled with other facilities and existing cash balances ensures that the Group has the resources available to fund its future growth plans.

Dividends

The directors are proposing a final dividend of 7.43 cent per share, which represents a 7% increase on the 2013 final dividend of 6.95 cent per share. This gives a total dividend for the year of 10.12 cent per share, an increase of 6% on the total 2013 dividend.

Subject to shareholder approval at the Company's 2015 Annual General Meeting, the proposed final dividend of 7.43 cent per share will be paid on 23 February 2015 to ordinary shareholders on the Company's register at 5.00 p.m. on 28 November 2014. A Dividend Reinvestment Plan (DRIP), which enables shareholders who elect to participate to use their cash dividend to acquire additional shares in the Company, is available in respect of the final dividend. The final date for receipt or cancellation of elections under the DRIP will be 27 January 2015.

2014 Annual Report and Annual General Meeting

The 2014 Annual Report and Accounts will be published in December 2014 and the Annual General Meeting of the Company will be held on 3 February 2015.

Investor relations

UDG Healthcare's senior management team spend a significant amount of time meeting with shareholders and the international financial community. We have increased our investor relations resources and are focused on increasing the awareness of the company among the investor and broker analyst community. We have recently attracted additional analyst coverage, with the number of covering analysts increasing from six to eight.

We communicate regularly with our shareholders throughout the year, specifically following the release of our interim and preliminary results, and at the time of major developments. Our website www.udghealthcare.com, is the primary method of communication for the majority of our shareholders. We publish our annual report, preliminary results and other public announcements on our website. In addition, details of our conference calls and presentations are available through our website.

The Board of Directors consider it important to understand the views of shareholders and receive regular updates on investor perceptions.

Our investor relations department provides a point of contact for shareholders and full contact details are set out through the investor relations section of our website. Shareholders can also submit an information request through the shareholder services section of our website.

Risk management

Financial risk management

The management of the financial risks facing the Group is governed by policies reviewed and approved by the Board. These policies primarily cover liquidity risk, credit risk, interest rate risk and currency risk. The primary objective of the Group's policies is to minimise financial risk at a reasonable cost. The Group does not trade in financial instruments.

The Group uses financial instruments throughout its businesses; borrowings and cash resources are used to finance the Group's operations; trade receivables and payables arise directly from operations; and swaps are used to manage the interest rate and currency risks and to achieve the desired currency profile of borrowings.

Liquidity risk management

The Group ensures that it has sufficient financing facilities available through cash flow generated from operating activities, loan notes issued, committed banking facilities and access to equity markets to meet its projected short and medium term funding requirements.

Interest rate risk management

The Group finances its operations through a mixture of retained profits, bank borrowings and funding raised on the US private placement market. The Group's policy is to borrow in the required currencies at both fixed and floating rates of interest and use interest rate swaps to manage the Group's exposure to interest rate fluctuations.

Currency risk management

UDG Healthcare plc's reporting currency and that in which its share capital is denominated is the Euro. Given the nature of the Group's businesses, exposure arises in the normal course of business to other currencies, principally sterling and the US dollar.

The majority of the Group's activities are conducted in the local currency of the country of operation. The primary foreign exchange risk arises from the fluctuating value of the Group's net investment in different currencies.

Credit risk management

The Group carries significant trade receivables and their recoverability is a material business risk. The Group uses a range of customer credit and collection procedures to actively manage its credit risk.

Income Statement

* 2013 comparatives have been re-stated in accordance with IAS19: Employee Benefits (Revised).

Group Statement of

Comprehensive Income

* 2013 comparatives have been re-stated in accordance with IAS19: Employee Benefits (Revised).

Group Statement of Changes in Equity

* 2013 comparatives have been re-stated in accordance with IAS19: Employee Benefits (Revised)

Group Balance Sheet

Group Cash Flow Statement

* 2013 comparatives have been re-stated in accordance with IAS19: Employee Benefits (Revised).

Notes to the Preliminary Announcement 

1. Reporting entity

UDG Healthcare plc (the "Company") is a company domiciled in Ireland. The preliminary consolidated financial information of the Company for the year ended 30 September 2014, are comprised of the Company and its subsidiaries (together referred to as the "Group") and the Group's interest in joint ventures and associates.

The financial information presented herein does not amount to statutory financial statements that are required by Section 7 of the Companies (Amendment) Act, 1986 to be annexed to the annual return of the Company. The financial information does not include all the information and disclosures required in the annual financial statements. The statutory financial statements for the year ended 30 September 2013 have been attached to the annual return of the Company and filed with the Registrar of Companies. The audit report on those statutory financial statements was unqualified and did not contain any matters to which attention was drawn by way of emphasis. The statutory financial statements for the year ended 30 September 2014 will be annexed to the next annual return of the Company and filed with the Registrar of Companies.

2. Basis of preparation

This announcement has been prepared on the basis of the results and financial position that the directors expect will be reflected in the audited statutory accounts when these are completed. The financial information presented in this report has been prepared in accordance with the Group's accounting policies under International Financial Reporting Standards (IFRS), as adopted by the EU and as set out more fully in the Group's last Annual Report.

Revisions to IAS 19 became effective for the Group for the first time for the financial year ending 30 September 2014. Comparative information for the year ended 30 September 2013 has been restated on a comparable basis as if the revisions to IAS 19 had been effective in 2013. These revisions have increased the pension charge recognised in the Income Statement by €595,000, the net finance expenses by €499,000 and increased the related deferred tax credit by €320,000 resulting in a reduction in the originally reported profits by €774,000 and earnings per share by 0.32c for the prior period. There has been a corresponding increase in the remeasurement gain of €1,094,000 recognised in the Statement of Comprehensive Income and related tax charge by €320,000. There is no net impact on the Group's net pension deficit in the current or prior years.

In addition to the impact of IAS 19 above, the following standards are effective for the year ended 30 September 2014 and only impact the presentation of results for the year ended 30 September 2014:

· IFRS 13 - Fair value measurement - this standard explains how to measure fair value and enhances fair value disclosures.

The Group early adopted Amendments to IAS 36 - Recoverable amount disclosures for non-financial assets during the current financial year. The IASB has issued the amendment to reverse the unintended requirement in IFRS 13 Fair Value Measurement to disclose the recoverable amount of every cash-generating unit to which significant goodwill or indefinite-lived intangible assets have been allocated. Under the amendments, the recoverable amount is required to be disclosed only when an impairment loss has been recognised or reversed.

The following standards and interpretations were also effective for the Group from 1 October 2013 but did not have a material effect on the results or the financial position of the Group:

The following standards, amendments to existing standards, and interpretations published by IASB are not yet effective for the year ended 30 September 2014 and have not been early adopted in preparing the financial statements:

A number of the standards (*) set out above have not yet been EU endorsed. Management are assessing whether these new IFRS requirements will have a material impact on the Group.

3. Segmental analysis

The Group's operations are divided into the following operating segments:

Ashfield Commercial & Medical Services - The Ashfield Commercial & Medical Services segment provides contract sales outsourcing, healthcare communications and related services to healthcare manufacturers. MASTA is now reported as part of this segment having moved from Sharp Packaging Services segment in the current year. The comparative has been adjusted to reflect the impact of this transfer.

Supply Chain Services - The Supply Chain Services segment combines all of the Group's healthcare logistics based businesses. The TCP Homecare business is now reported as part of this segment having moved from Sharp Packaging Services segment in the current year. The comparative has been adjusted to reflect the impact of this transfer.

Sharp Packaging Services - The Sharp Packaging Services segment provides outsourced commercial and clinical trial packaging services to healthcare companies. The comparative has been adjusted to reflect the impact of the transfers to other segments outlined above.

The segmental analysis of the business corresponds with the Group's organisational structure and the Group's internal reporting for the purpose of managing the business and assessing performance as reviewed by the Group's Chief Operating Decision Maker (CODM), which the Group has defined as Liam FitzGerald (Chief Executive Officer).

The amount of revenue and operating profit under the Group's operating segments is as follows:

* 2013 comparatives have been re-stated in accordance with IAS19: Employee Benefits (Revised). See notes 2 and 14 for further details. The 2013 comparatives have also been re-stated to reflect the divisional split following the rebranding concluded at the end of September 2013 and the consequent transfer of the TCP Homecare and MASTA businesses from Sharp Packaging Division to Supply Chain Services and Ashfield Commercial & Medical Services divisions respectively.

4. Share of joint ventures' profit after tax

In November 2013, the Group acquired an additional 10% shareholding in Magir Limited, the Group's joint venture investment, increasing the Group share of profits from 25% to 35% with effect from this date. In August 2014, the Group disposed of its 50% shareholding in UniDrug Distribution Group Limited ("UniDrug").

5. Exceptional items

Impairment of goodwill and intangibles arose during the current year as the Group wrote down the carrying value of goodwill and intangibles in relation to the Pharmaceutical Trade Services, Inc., and MASTA cash generating units. The non-cash goodwill and intangibles impairment charge of €10,685,000 arose from a review of the value in use calculation at 30 September 2014.

Deferred contingent consideration of €8,160,000 in respect of prior year acquisitions was released in the current year following a review of earn out targets.

On 28 February 2014, the Group disposed of its shareholdings in its subsidiaries Arjun Products Limited, Craig & Hayward Limited and The Specials Laboratory Holdings Limited. The loss on disposal arising was €12,049,000. This amount included goodwill and intangible assets net of deferred tax ascribed to these businesses of €32,046,000 and related disposal costs of €389,000. In addition, net foreign currency translation losses previously recognised in the foreign currency translation reserve of €407,000 were reclassified to the Income Statement.  Net assets on disposal were €6,606,000. Total consideration (net of cash disposed) was €27,399,000.

On 18 August 2014, the Group disposed of its 50% shareholding in its joint venture UniDrug Distribution Group Limited ("UniDrug"). The profit on disposal arising was €68,684,000. The carrying value of the joint venture on disposal was €11,253,000 and the related disposal costs were €566,000. In addition net foreign currency translation losses previously recognised in the foreign currency translation reserve of €1,915,000 were reclassified to the income statement. Total consideration was €82,418,000.

6. Finance income and expense

* 2013 comparatives have been re-stated in accordance with IAS19: Employee Benefits (Revised).

7. Earnings per ordinary share

* 2013 comparatives have been re-stated in accordance with IAS19: Employee Benefits (Revised).

** excluding amortisation of acquired intangible assets, acquisition costs and exceptional items (net of tax).

The adjusted figures for earnings per share are intended to demonstrate the results of the Group after eliminating the impact of amortisation of acquired intangible assets, acquisition costs and exceptional items and are deemed by management to be a key metric of monitoring Group performance. Treasury shares have been excluded from the weighted average number of shares in issue used in the calculation of earnings per share. The average market value of the Company's shares for the purposes of calculating the dilutive effect of share options was based on quoted market prices for the year.

8. Property, plant and equipment

9. Movement in goodwill, intangible assets and investment in joint ventures and associates

In November 2013, UDG Healthcare plc purchased an additional 10% in Magir Limited, the Group's joint venture entity, increasing its shareholding to 35%.

The disposals relate to the disposal of Arjun Products Limited, Craig & Hayward Limited and The Specials Laboratory Holdings Limited. The related deferred tax on the intangible assets disposed was €1,106,000. The disposal of joint ventures relate to the disposal of UniDrug Distribution Group Limited. See note 5 for further details.

The Group has revised its estimate of the fair value of intangible assets in respect of prior year acquisitions. This has resulted in a decrease in goodwill relative to amounts previously recorded. On the basis that this adjustment was not deemed to be material, it was accounted for in the current year.

10. Other reserves