UDG Healthcare PLC could spend up to US$600 million on acquisitions, its chief executive said, after the company raised its full-year earnings forecast after an acquisition helped prop up profit in the first half.
The Irish healthcare services provider yesterday reported a 19 percent increase in pretax profit for the six months ended March 31, sending its shares up 6 percent to a record high of £8.125.
“We’ve looked at acquisitions — small US$20 million ones right up to US$200 to US$300 million — and in total the consideration we could use is US$500 to $600 million,” chief executive Brendan McAtamney said.
The Dublin-based company said strong performance at its acquisition, STEM Marketing — a provider of commercial, marketing and medical audits to pharmaceutical companies — helped boost profit in the first half.
The firm expects a 15 to 18 percent increase in diluted earnings per share, on a constant currency basis, for the year ending September.
The group had earlier forecast 13 to 16 percent growth in full-year earnings per share.
“With a much stronger-than-expected first half, tailwinds across its US businesses building ... we think even this raised guidance looks quite conservative and would expect consensus forecasts to increase by at least 2 percent,” Liberum analyst Graham Doyle said.
McAtamney said UDG would look to acquire US-focused businesses to strengthen its Sharp Packaging Services unit, which is engaged in contract packaging and clinical trial packaging services for the pharmaceutical and biotechnology industries.
UDG, which traces its roots to a cooperative called the United Drug Chemical Co in Ireland, is also keen on bolstering its Ashfield operations in Japan through acquisitions, he said.
UDG’s first-half profit stood at US$52.9 million. Revenue for the period rose 8 percent to US$578.9 million.
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