UDG Healthcare interim profits edge up; two acquisitions announced

Despite reporting a 4% dip in total revenues to $548.3m, UDG managed to eke out a 1% improvement to its total adjusted operating profits to $47.4m.

UDG also saw its adjusted net operating margin increase from 11.8% to 12.5% during the half but its overall performance was hit by an exceptional charge of $15.2m related to two legal matters.

The company cut its net debt 6.5% year-on-year to $56.8m thanks to a strong cash flow performance and positive working capital inflow.

UDG also announced that it has "significantly strengthened" its Ashfield Communications and Advisory business with the acquisition of US-based strategic management healthcare consultancy Putnam Associates and British healthcare policy and communications consultancy Incisive Health for a combined consideration of up to $106m.

UDG, which recorded a 5% uptick in its interim EPS to 21.21p during the six months ended 31 March, upped its full-year adjusted EPS growth guidance to between 5% and 7%, in part to reflect the acquisitions.

Chief executive Brendan McAtamney said: "Both transactions are a good strategic and cultural fit, meet our target financial hurdle rates and further expand our current capabilities."

Looking forward, UDG said it expects to continue its more than 30-year history of dividend growth in 2019. It declared an interim dividend of 4.46 cents per share on Tuesday, up 5% from the previous year.

At 1050 BST, the shares were up 7.3% at 703.50p.