UDG Healthcare interim profits rise but H2 to be hit by Covid

UDG Healthcare posted a rise in interim profit and revenue on Tuesday thanks to solid performances form its Ashfield and Sharp businesses, but cautioned that it expects some impact from Covid-19 in the second half.

In the six months to the end of March, pre-tax profit increased to $62.3m from $30.3m in the first half a year ago, on revenue of $693.6m, up 6%.

Ashfield's adjusted operating profit rose 24% to $58.6m, driven by good underlying growth in Communications & Advisory, and the benefit of 2019 acquisitions. Meanwhile, operating profit at Sharp was up 25% to $22.7m, driven by strong underlying growth across the division, UDG said.

The company had already said in its trading update in April that it expects lower activity levels than previously anticipated in the second half of FY20.

Chief executive officer Brendan McAtamney said: "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."

Financial guidance remains withdraw due to uncertainty about the coronavirus pandemic, while the dividend is still suspended.

At 0945 BST, the shares were up 3.7% at 646.50p.

Liberum said: "On balance we believe today's update is a positive and gives us greater confidence in our midterm forecasts.

"While there is still some uncertainty around this we are increasingly confident that fiscal 2021 will be a more normalised year given the strong industry backdrop with all of the Large Cap European Pharma names beating Q1 expectations last month and reiterating guidance."