UDG Healthcare lifts earnings guidance after decent first half

International healthcare services provider UDG Healthcare announced its interim results for the six months to 31 March on Tuesday, with diluted earnings per share from continuing operations increasing by 19%, or 29% on a constant currency basis, which the board said was aided by acquisitions and other timing benefits during the first half of the financial year.

The FTSE 250 firm said guidance for full year constant currency continuing group diluted earnings per share increased from a range of 13% to 16% previously, to be between 15% and 18% ahead of last year, including acquisitions.

Revenue growth was 8%, or 15% on a constant currency basis, to $578.9m, while operating profit grew 13%, or 21% on a constant currency basis, to $58.8m.

Its operating margin increased to 10.2% from 9.7%, while the firm’s net operating margin increased to 12.0% from 11.4%.

Profit before tax was up 19%, 29% on a constant currency basis, to an adjusted $52.9m.

Total group earnings per share fell 21%, or 15% at constant currencies, which the board said was due to the sale of the United Drug businesses in April 2016.

The board confirmed a 5% increase in the interim dividend to 3.58 cents per share, and confirmed net cash of $91m as at 31 March.

It reported a return on capital employed as at 31 March was 13.8%, up from 13.5% a year earlier.

“The first half of 2017 has been another very progressive period for UDG Healthcare, with strong growth delivered and continued progress made in pursuit of the group's strategic objectives,” said chief executive officer Brendan McAtamney.

“The continuing group's earnings per share increased by 19%, driven by continued momentum in underlying profit growth and a strong performance by our recent acquisition, STEM.

“The group is increasing its guidance for constant currency diluted earnings per share for the year to 30 September 2017 by 2% to a range of between 15% and 18% ahead of last year.”