Dublin-based healthcare services company UDG Healthcare grew its adjusted operating profit by 7 per cent over the last year despite fears the Covid-19 pandemic would be felt acutely during the second half of the year.
The company, which published its results for the year ended September 30th, 2020, on Tuesday, employs about 9,000 people in 29 countries.
About two-thirds of its operating profit is generated by its Ashfield division, which offers advisory, communications, commercial and clinical services. The remainder of the UDG’s operating profit is generated by its Sharp division, which deals in pharmaceutical packaging.
It said on Tuesday it achieved revenue of just under $1.3 billion (€1.1 billion) in the year, which was 1 per cent behind 2019. Revenue from its Ashfield division, which has been hardest by the pandemic, decreased by 6 per cent, while at Sharp it increased by 11 per cent.
Group net revenue was 5 per cent ahead of 2019 and net revenue on an underlying basis was 1 per cent ahead, excluding the impact of foreign exchange, acquisitions and disposals.
Its adjusted operating profit of $165.3 million was 7 per cent ahead of 2019. The adjusted net operating margin for the businesses for the year was 14.3 per cent, ahead of 14 per cent in 2019.
Net interest costs and pre-exceptional items of $13.3 million were higher than 2019. Interest income was also impacted by lower interest income on US cash deposits. This delivered an adjusted profit before tax of $152 million.
The group incurred an exceptional loss of $2.7 million after tax in the year. A charge of $8.1 million, net of tax, was incurred in relation to restructuring of Ashfield’s operations due to market conditions arising from the Covid-19 pandemic.
This was primarily within the meetings and events business and the STEM business. The charge primarily related to redundancy.
The company said it “retains a robust financial position with a strong balance sheet and liquidity profile”. It also has access to fully committed undrawn debt facilities of $246 million.
In August, the board declared an interim dividend of 4.46 cent per share relating to the first half of the year which had not been impacted by the pandemic. This was in line with the 2019 interim dividend.
The board has now proposed a 1.6 per cent increase in final dividend to 12.54 cent per share, yielding a full year dividend increase of 1.2 per cent to 17 cent per share.
From April until July, UDG accessed government support in light of Covid-19 related uncertainty. It said it has now repaid any specific government support related to the Covid-19 pandemic.
In terms of outlook, UDG said it “remains a strong and well diversified business, supported by excellent long-term fundamentals, as evidenced by the strong financial performance in the full year”.
“While some parts of Ashfield continue to be impacted by the pandemic, the group’s resilient business model leaves UDG Healthcare well positioned for continued future growth,” it added.
UDG chief executive Brendan McAtamney said he was “pleased” with the results, which were ahead of guidance.
“This was driven by exceptionally strong growth in Sharp, in particular for serialised biotech and specialty packaging,” he said.
“Despite some parts of Ashfield being impacted by Covid-19, we adapted rapidly to support clients virtually and overall Ashfield performed in line with expectations.”