United Drug, the pharmaceutical distribution company, has recorded a 22 per cent rise in pretax profits from £6,006,000 to £7,323,000 in the year ended September 30th 1997. The results are broadly in line with predictions and the group looks set to continue with the upward trend, bringing profits up to around £8.5 million this year. Apart from core growth, it will have the benefits from Dublin Drug which was acquired last month. And UDG, the joint venture with UniChem, may make a positive contribution following its share of losses of £313,000 this year, reflecting start-up costs.
The key objectives this year are to bed-down Dublin Drug and get benefits from UDG, Mr Jerry Liston, chief executive, told The Irish Times. "We are looking for steady growth".
The group is continuing to look for suitable acquisitions. Nothing is imminent but with a strong balance sheet, it could spend about £20 million without recourse to shareholders. Earnings per share grew by only 2 per cent from 21.80p to 22.30p but this reflects the rights issue which increased the share capital by 25 per cent. Shareholders are to share in the good results with final dividend of 6.90p per share, bringing the total up to 9.90p, or 10 per cent higher than a year ago.
United Drug experienced growth from its operations in both Northern Ireland and the Republic. It benefited from major extensions to the distribution centres in Dublin and Belfast. United Drug Wholesale "made substantial progress in sales and profit growth" the group said. The market is estimated to have grown by 12 per cent but United Drug said it further increased its share. The group's healthcare agency distribution business, operated by United Drug Distributors, enjoyed more growth in the past year. There was also an expansion into the animal healthcare products sector. In Northern Ireland, Sangers consolidated its position as market leader in pharmaceutical wholesales through the acquisition of the business of Daniels Pharmaceuticals in Belfast.
The group's balance sheet shows a rise in shareholders' funds from £24.1 million to £41.4 million. Reflecting the rights issue, the company is very liquid with cash (gross) of £9.5 million, up from £1.6 million. The shares unchanged at 415p (12 months high 435p low 325p) are on a prospective p/e of 16.9, assuming a rise in earnings per share from 22.30p to 24.5p.
