Marketing

UDG shows strong growth in revenue, profit in first half of 2020


Healthcare services provider UDG said it put in a strong first half performance, despite the ongoing coronavirus pandemic.

Interim results for the six months to March 31st showed total revenue growth of 6 per cent to $693.6 million (€,635.4 million) with total net revenue growth of 10 per cent to $596.2 million.

Adjusted diluted earnings per share rose 16 per cent.

UDG said its financial performance was well ahead of the first six months of 2019, but the impact of the pandemic shutdown is expected to be felt in the second half of the year.

The company suspended its interim dividend and withdrew its financial guidance for 2020 in April, but it had a strong balance sheet and liquidity to help cushion the blow.

UDG has implemented a mitigation plan for the pandemic across the group, including cost-control measures on discretionary expenditure, a recruitment freeze, reducing freelance spending, reduced working hours and furloughing of employees. The board and the senior executive team took a 20 per cent cut in fees and salaries for at least three months.

Adjusted operating profit growth was 24 per cent, growing to $81.3 million, buoyed by continued growth in its Ashfield and Sharp divisions.

Ashfield showed a 24 per cent rise in operating profit to $58.6 million on a constant currency basis, with good underlying growth in its communications and advisory business. The units had seen some project deferrals and cancellations, and in-field based activities such as meetings and events, the clinical educator business and audit services in Stem, were experiencing more significant disruption and a fall in activity. However, clients were being served remotely where possible.

Sharp also put in a strong performance during the period, with operating profit up 25 per cent to $22.7 million. The division, which packages medicines, has been categorised as essential. May saw the completion of the acquisition of a packaging facility in the US, a deal that has added incremental capacity to Sharp’s US commercial packaging business.

“While we expect to see an impact from Covid-19 in the second half, we are implementing plans across the Group to mitigate this,” said chief executive Brendan McAtamney. “UDG is a strong and diversified business, underpinned by excellent long-term market fundamentals and a robust balance sheet and cash flow position. While uncertainty remains, I am confident the decisive actions taken now will ensure we remain well positioned through the crisis and beyond.”



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