Healthcare services group United Drug recorded a 16 per cent increase in first-half profits, and said it was on track for further double-digit growth in the second half of the year.

Chief executive Liam Fitzgerald said the company had benefited from strong organic growth as well as several acquisitions, of which two, Masta and Endescopy, had exceeded expectations.

He said the picture was likely to remain the same for the rest of the year as the group took advantage of a favourable environment, including good demographics - people living longer and relying on more medication - and an increasing trend by large pharmaceutical companies to outsource some operations.

Adjusted pretax profit, a figure that excludes intangible amortisation and one that the company says is a better measure of underlying performance, was €29 million in the six months to the end of March, compared with €24.9 million in the same period last year.

Revenue was 9 per cent ahead at €770.1 million.

Net income, meanwhile, was up 12 per cent at €22.4 million, while the interim dividend was 15 per cent ahead at 1.97 cent

Analysts welcomed the figures, which were broadly in line with expectations, and said they would be leaving their full-year forecasts unchanged.

Orla Hartford, an analyst at NCB, said the results reflected a strong performance, and the healthy balance sheet gives the company considerable scope for acquisitions to boost earnings from 2007 onwards.

Mr Fitzgerald confirmed the company would be seeking further acquisitions in both Europe and the UK. United Drug, which has made five acquisitions in the past 12 months, last month made its first foray into continental Europe with the acquisition of Belgium-based Budelpack.