UDG Healthcare puts in decent third quarter performance

UDG Healthcare updated the market on its trading for the period from 1 April to 30 June on Wednesday, reporting that group trading performance for the quarter was ahead of the same quarter last year.

The FTSE 250 firm said “strong” contributions from acquisitions and good underlying growth from Ashfield Communications & Advisory and Sharp more than offset a lower contribution from Ashfield Commercial & Clinical and Aquilant.

In its Ashfield divisions, UDG said Ashfield Communications & Advisory performed “strongly” in the period due to a combination of good underlying growth and the benefit of acquisitions.

Ashfield Commercial & Clinical, meanwhile, experienced a “challenging” quarter, with operating profit said to have been well below the same quarter last year due to the phasing of contracts and fewer new business development opportunities.

“Overall, trading in Ashfield was ahead of the same quarter last year,” the board said in its statement.

In July, the group announced the acquisitions of Create NYC - an innovative communications agency - and SmartAnalyst - a strategic commercialisation consulting and analytics business - for a combined consideration of up to $82.4m.

Over in its Sharp business, UDG said it delivered double digit operating profit growth ahead of the same quarter last year.

That was reportedly driven by a strong performance in Sharp US, offset by a slower-than-anticipated ramp-up in activity levels in Sharp Europe.

For Aquilant, the company said trading was “well behind” the same quarter last year, due to the previously announced exit of contracts with VSI and Link.

Looking at the books for the nine months to 30 June, UDG said group revenue and profit before tax for the period was well ahead of the prior year, primarily driven by the benefit of acquisitions completed in 2017.

“The group's balance sheet remains strong leaving it with significant capacity to execute further strategic acquisitions to complement its existing growth platforms,” the board said.

“The group reiterates its full year guidance for constant currency adjusted diluted earnings per share growth for the year to 30 September to be between 18% and 21% ahead of last year's earnings per share of 37.1 US cents.”

UDG also noted that the average 2017 financial year exchange rates were 78.91p to the dollar, and 90.47 euro cents.

It said that, based on current prevailing exchange rates, the group was likely to have a modest foreign exchange benefit on the translation of non-US profits in the 2018 financial year.

The board said it expected to issue its preliminary results for the year to 30 September on 27 November.