UNITED DRUG PLC
INTERIM MANAGEMENT STATEMENT
Dublin, London, 14 August 2012: United Drug plc ("United Drug", "the Group" or "the Company"), a leading international provider of services to healthcare manufacturers and pharmaceutical retailers, today issues the following Interim Management Statement covering the period from 1 April 2012 to the date of this announcement.
Trading across the Group during the period has been strong. Group revenues and profits for the nine months to 30 June 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 now contributing over 70% of group profits. In addition, cash generated from operations was also strong.
During the period the Company announced the acquisitions of Watermeadow Medical Limited and Watermeadow Medical Consulting Inc. ("Watermeadow") and Pharmexx GmbH ("Pharmexx"). The Pharmexx acquisition is expected to complete by 31 August 2012. These strategically important acquisitions will help to significantly grow our international footprint and further enhance our multi-country offering and capability as a provider of outsourced services to life sciences companies.
Quarter to 30 June 2012
SALES, MARKETING & MEDICAL
The division provides sales, marketing and medical services to multinational life sciences companies. Trading during the period has been strong with all parts of the division recording profits ahead of the same period last year.
The recent acquisition of Watermeadow represents a high quality addition to our medical communications capability and is complementary to our existing business. Watermeadow is expected to make a meaningful contribution to profitability in the division in the coming years.
The acquisition of Pharmexx, once completed, will establish United Drug as one of the leading international providers of contract sales outsourcing services. On completion of the acquisition we will be providing these services to over 200 multinational companies in more than 20 countries with the division employing 4,000 people. The acquisition also provides a major platform for us to develop our marketing and medical services into more global offerings to our clients.
HEALTHCARE SUPPLY CHAIN
The division provides distribution services to life sciences companies and pharmacies in the UK and Ireland and employs over 1,000 people. Revenues and profits in the division are ahead of the same period last year despite significant healthcare austerity measures in the UK and Ireland.
In the Republic of Ireland, while profits are down slightly, our wholesale business has again outperformed the market. Cost savings, following last year's restructuring, are now being realised and the business is expected to continue to trade well, in a tough environment, for the remainder of the year. Our Northern Ireland wholesale business has also outperformed its market and grown profits well ahead of last year in the quarter.
New business wins are contributing to a very strong performance in our pre-wholesale businesses, particularly in the UK market, and we anticipate significant growth in profits for the full year.
Our Medical & Scientific business continues to trade well and recent new business wins, both in the UK and Ireland, have added to this momentum. The business is well positioned for strong revenue and profit growth for the remainder of this year and into the next financial year.
The introduction of a drug tariff on certain specials medicines in the UK is still having an impact on our businesses in this sector and profits in the current year are expected to be below last year. However, the tariff will help to remove uncertainty from this market and this together with new revenue streams means that the longer term outlook for this business remains positive.
PACKAGING & SPECIALTY
The division, which employs over 1,000 people, provides outsourced packaging services for healthcare manufacturers in the US and Europe. The division also provides speciality homecare and distribution services in the UK and Ireland.
Revenues and profits in the period are well ahead of the same period last year.
Our US packaging business continues to trade very strongly and win new customers as a result of its high quality proposition and reputation for excellent service to US pharma companies. Revenues and profits in the business for the period are well ahead of last year.
Our European packaging business is still trading behind last year. The new management team now in place combined with a much closer alignment with the US business is starting to have an impact. Management, business development and quality processes have all been improved, the cost base has been re-aligned and there have been new business wins with some of our US customers. As we fill available capacity we expect to drive increased returns in a market seeing a growing demand for outsourcing services.
Our Irish specialty business, the market leader, has grown well in the period and has a number of exciting opportunities as community and home healthcare services develop in Ireland.
Based on the strong trading performance for the year to date, the outlook for the remainder of the year, and stability in current exchange rates, the Group now expects adjusted diluted earnings per share for the year to 30 September 2012, before one-off costs associated with current acquisition activity, to be between 8% and 10% ahead of last year.
The Group also expects to deliver another strong cash flow performance in the year. With strong cash flows and modest debt levels the Group remains well positioned to support its future growth objectives both organically and through additional acquisitions.
The Board is currently reviewing the listing arrangements for shares in United Drug, given the significant growth in international operations of the Company and the substantial presence of international investors on the share register.
The Board believes that FTSE UK index inclusion would result in a further increase in UK and international investor awareness of United Drug. The Company anticipates that if shares in United Drug were only listed on the London Stock Exchange (LSE) they should be eligible for the FTSE UK Index Series, provided the Company maintains the Premium Listing of its Ordinary Shares on the London Stock Exchange (LSE) and there is adequate trading liquidity on the LSE. Consequently, the Board is exploring the possibility of de-listing United Drug shares from the Irish Stock Exchange and a further announcement will be made as appropriate.
United Drug will host a conference call for investors and analysts at 8.30am (BST) today, 14 August 2012 to discuss this statement. The dial-in details are as follows:
Ireland: +353 (0)1 431 9648
UK/International: +44 (0) 1452 555 566
US: +1 631 510 7498
Access Code: 16692215
A playback facility will be available from 1.30pm (BST) on Tuesday 14 August until 1.30pm (BST) on Monday 27 August on +44 (0) 1452 55 00 00. The access code for the replay will be 16692215#.
As part of its ongoing investor relations activities United Drug plc will host an Investor Day seminar for investors and analysts in London on the morning of Friday 14 September.
2012 Reporting Timetable
The Group will issue results for the year to 30 September 2012 on Wednesday 14 November, 2012.
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.
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: +44 207 250 1446
About United Drug plc
Listed on the Stock Exchanges in London and Dublin, 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 USA.
The Company operates across three divisions, Healthcare Supply Chain, Sales, Marketing & Medical, and Packaging & Specialty.
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 an emerging presence in the UK.
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