UDG Healthcare has said it expects adjusted earnings per share to increase by 18 to 21 per cent in 2018, driven by strong trading in the first quarter and gains from the US tax reforms.
The Irish company, which provides outsourced sales and marketing, drug distribution and packaging services to healthcare companies, said pre-tax profit in the first quarter was well ahead of last year, helped by acquisitions.
UDG reported adjusted earnings per share of 37.1 cents, on a constant currency basis, for the year ended September 30, 2017. The company, which made six acquisitions in 2017, said four were performing in line with its expectations. UDG said it would gain from a reduction in the headline US federal corporate tax rate to 21 per cent from 35 per cent and that its tax rate for 2018 is expected to be 4 per cent lower than the 19 per cent it had previously expected.
Operating profit at the Ashfield division, which provides clinical and commercialisation services and contributed over 60 per cent of the total revenue, was “significantly ahead” of last year.
The Sharp division has seen a slowdown in profits since last year, after demand fell for its bottled packaging services in the US. Analysts expect the business to pick up by next year.
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UDG said underlying profit growth will be largely delivered during the second half of the year.