United Drug has reported a 21 per cent rise in first-half pre-tax profits and said it is confident it can maintain its track record of double-digit growth.
The company, which supplies the healthcare sector in Ireland and the UK, recorded profits of €19.4 million in the six months ended March 31st, up from €16 million a year earlier.
Turnover was up by 15 per cent to €617.5 million, as all of the group's divisions recorded an improvement in sales and profitability.
Adjusted earnings per share (EPS) rose by 17 per cent to 7.29 cents and the company is proposing to pay an interim dividend of 1.32 cents, a 16 per cent increase on last year.
Analysts have upgraded their forecasts for the group by between 1 and 2 per cent in the wake of the results, which were ahead of market expectations.
They are now looking for full-year EPS of around 15.3 cents. Shares in the company lost five cents, however, to €2.55 as dealers reported some profit-taking.
United Drug said its wholesale pharma division consolidated its market share gains of recent years in the first half. It holds about 44 per cent of this market in the Republic, while its Sangers division boasts about 50 per cent of the Northern Irish market.
Its contract distribution outsourcing division also performed well, the company said. However, the only disappointment in the results was in this sector as the company's UniDrug joint venture in the UK performed below expectations due to unscheduled delays in the building of a new warehouse.
This led to additional running expenses in existing premises and knocked UniDrug profits to €1 million from €1.26 million.
The medical and scientific division was boosted by the acquisition last year of Mantis Surgical, which reached its 12-month earn-out target ahead of schedule.
The contract sales outsourcing business also had a good first-half, increasing its share of the UK market to 42 per cent from 40 per cent.
The company, which has a debt/equity ratio of just 35 per cent, remains on the lookout for bolt-on acquisitions, particularly in the medical and scientific area and in speciality distribution in the UK.
Finance director Mr Barry McGrane said United Drug would be comfortable with a gearing level of 50 per cent and would be prepared to let gearing go to 70 to 75 per cent to fund "the right opportunity".
As well as looking to expand in the UK, United Drug is also planning to move into continental Europe and is hoping that it will derive 6 to 7 per cent of its earnings from northern Europe within the next five years.
