UDG Healthcare starts year strong in US

UDG Healthcare was warming the market up ahead of its AGM on Tuesday, reporting good growth in its US businesses but suggesting things remained tough in Europe during the three months to 31 December 2015.

The FTSE 250 healthcare group's board said trading across its Ashfield Commercial & Medical Services division was strong in the first quarter, with operating profit ahead of the same period last year.

"Operating profit growth was particularly positive within the US and European commercial businesses, whilst the UK commercial business demonstrated a lowe growth profile in its more mature market", the board said in a statement.

Its Sharp Packaging Services division saw previous positive trading momentum continue, the board said, again with operating profits significantly ahead of the previous year.

Sharp Europe's progress continued to be "incremental", with the company re-aligning the business for future profitability.

"The capacity expansion programme at our Allentown facility on Pennsulvania remains on target to open in April 2016, with the first phase of packaging suites becoming operational in the second half of 2016", the board added.

Operating profits at the Aquilant division were slightly ahead of the same quarter last year as well.

UDG Healthcare said the disposal of its United Drug Supply Chain and MASTA businesses was approved by shareholders on 13 October.

The actual timing of the disposal remained subject to competition authority approval, which UDG expected to come through by June 2016. United Drug had traded "satisfactorily" during the period.

"Based on the underlying trading performance to date, we expect constant currency adjusted diluted earnings per share for the continuing group, for the year to 30 September 2016 to be between 6% and 8% ahead of last year's [figure] of 27.4c (21p)", the board said about its outlook.

"The group currently reports profit in euro, and its profits benefit from any strengthening of the US dollar and pound sterling exchange rates as over 90% of the continuing group;s profits are now in these currencies", it added.

UDG Healthcare was holding its annual general meeting in Dublin later on Tuesday, where current CEO Liam FitzGerald would step down and Brendan McAtamney would take the reins.

This was a previously announced transition, however it had been brought forward to the AGM today. FitzGerald would continue as a non-executive director intil September 2016.