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UDG Healthcare reinstates guidance, declares interim dividend

By Josh White

Date: Wednesday 05 Aug 2020

UDG Healthcare reinstates guidance, declares interim dividend

(Sharecast News) - UDG Healthcare reinstated its guidance and declared an interim dividend on Wednesday, as its trading visibility improved with the reopening of a number of its markets.
The FTSE 250 company had suspended its financial guidance for the year in April, in response to the uncertainty caused by the Covid-19 pandemic.

It said on Wednesday that, while some uncertainty remained, given the improvement in visibility across the divisions, it was reinstating financial guidance for 2020.

The group was expecting adjusted diluted earnings per share for the year ending 30 September to be between 43 and 45 US cents (33p and 34p).

That guidance, the board cautioned, assumed no material increase in current Covid-19 related restrictions.

"Following a strong first half, as expected the pandemic had an adverse impact on trading during the third quarter to 30 June, and group constant currency profit before tax for the quarter was below the same period last year," the board said of its current trading.

Operating profit in its Ashfield division was "well behind" the same quarter last year.

As it said at its interim results in May, in-field activities, including the meetings and events business, field-based representatives and audit services in STEM, were the most impacted by the pandemic.

"Despite the tough backdrop, the remainder of Ashfield performed well, harnessing digital and technology solutions to serve our clients."

Sharp, meanwhile, traded "very strongly" during the quarter, with operating profit "significantly ahead" of the same period last year.

Growth was achieved across all parts of the business, driven by continued strong demand, an improving mix effect, and operational improvements as the business adapted to the challenges presented by Covid-19.

"The group is pleased to announce that Sharp has completed a $37.5m investment for a 25% shareholding, with an option to acquire the remaining 75%, in Berkshire Sterile Manufacturing - a Massachusetts based sterile packaging and manufacturing services business," the board confirmed.

"This investment further expands Sharp's capabilities into sterile fill and finish manufacturing and is highly complementary to its existing clinical trial, packaging and related services."

Notwithstanding the challenges faced during the third quarter, UDG said group constant currency profit before tax for the nine months ended 30 June remained ahead of the prior year, primarily reflecting the benefits of acquisitions completed in 2019, and "modest" underlying growth.

At the time of the April trading update, the board decided to suspend the interim dividend for the first half, and had since kept that decision under review.

On Wednesday, taking into account its strong liquidity position and improved visibility, the board declared an interim dividend of 4.46 cents per share, in line with the 2019 interim dividend.

"The board continues to keep the decision to pay a final dividend for the full year to 30 September under review, and will provide a further update in November as part of the group's 2020 preliminary results, taking into account market conditions at that time."

Finally, looking at its leadership, the board announced the appointment of Shane Cooke as its new chair from 1 October.

Cooke joined the Board on 1 February 2019, and has "extensive experience", both executive and non-executive, in the pharmaceutical and life science sectors in Europe and in the United States.

He was succeeding Peter Gray, who was retiring as chair and a director at the end of September, as previously indicated.

In addition, the group announced the appointment of Ryan Quigley as its chief operating officer, who would join on 14 September.

"Ryan will have responsibility for driving long-term strategic growth including increasing collaboration within Ashfield and Sharp," the board said.

"Ryan has over 25 years' experience in the pharmaceutical industry in commercial leadership roles, including most recently at AbbVie and previously at Pfizer, Bristol Myers Squibb and AstraZeneca."

UDG Healthcare said it was expecting to issue its preliminary results for the 12 months ending 30 September on 24 November.

At 0828 BST, shares in UDG Healthcare were up 5.16% at 744p.

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