UDG Healthcare plc (LON:UDG), a leading international healthcare services provider, announced today its results for the six months to 31 March 2020, in which the Group delivered a strong first half performance and an update on the impact of COVID-19.
Key updates
· Strong H1 FY20 performance well ahead of prior year:
o Adjusted diluted earnings per share (EPS) increased by 16% (16% on a constant currency basis)
o Underlying* net revenue growth of 4%. Total net revenue growth of 10% on a constant currency basis
o Underlying* adjusted operating profit growth of 10%. Total adjusted operating profit increased by 24% on a constant currency basis, reflecting continued growth in Ashfield and Sharp
o Ashfield’s operating profit increased by 24% on a constant currency basis, driven by good underlying growth in Communications & Advisory, and the benefit of 2019 acquisitions
o Sharp performed very strongly, with operating profit increasing by 24% on a constant currency basis driven by strong underlying growth across the division
o Adjusted net operating margin increased from 12.0% to 13.6%
· Robust balance sheet with net debt to EBITDA of 0.3x** and a continued strong cash flow conversion performance
· In May, Sharp completed the acquisition of a packaging facility in the U.S., adding incremental capacity to the U.S. commercial packaging business
· COVID-19 impact:
o The health and wellbeing of our people and serving our clients remains the Group’s priority
o H2 FY20 performance expected to be impacted by COVID-19
o Ongoing mitigation plans being implemented across the Group
o As previously announced in the April 2020 trading update, FY20 interim dividend suspended and FY20 financial guidance withdrawn due to current uncertainty
*underlying growth adjusts for the impact of currency translation movements and any acquisition or disposal activity
**calculated in line with financial covenant requirements
Chief Executive’s comment
UDG Healthcare Chief Executive Officer, Brendan McAtamney commented:
“The Group’s priority remains on protecting the health and wellbeing of our people and serving our clients during this challenging time. I am immensely proud of the continued hard work and resilience of our people and want to reiterate my continued appreciation for their dedication and commitment.
As announced in our April 2020 trading update, we delivered a strong first half performance, well ahead of the prior year, driven by underlying growth and acquisitions in Ashfield, and strong demand in our Sharp 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.
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.”
