UDG Healthcare expects 5-8 percent rise in full-year EPS

By Roshni Menon

(Reuters) – UDG Healthcare Plc said it expected a 5-8 percent rise in adjusted full-year earnings per share on a constant-currency basis, and that reported EPS could be higher than this if exchange rates remained around current levels.

Shares in the FTSE-250 company, which provides outsourced sales and marketing, drug distribution and packaging services to healthcare companies, rose more than 5 percent to a record high of 417.5 pence in morning trade on Tuesday.

Dublin-based UDG, formerly known as United Drug, reports results in euros but makes about 70 percent of its profit in pounds and dollars.

The euro has fallen about 10 percent against the dollar and about 3 percent against the pound since the start of the company’s 2015 financial year on Oct. 1.

“UDG has left enough room for upgrades through FY15 if positive momentum continues,” Jefferies analysts said in a note.

The company reported adjusted earnings of 28.77 euro cents per share in the year ended Sept. 30. Average exchange rates were 82 pence and $1.36 to the euro, UDG said.

“At current exchange rates, we would expect a further 5-6 percent benefit on the bottom line, meaning guidance implies adjusted EPS growth of 10-13 percent for the full year,” Berenberg analysts said in a note.

Chief Financial Officer Alan Ralph told Reuters the company would take a charge of about 10 million euros this year, related mainly to the restructuring of its healthcare communications business and for changes in its United Drug supply chain unit.

The restructuring is expected boost earnings per share by 2 percent in the current financial year and by an additional 1 to 2 percent the following year, Ralph added.

UDG shares were up 4.1 percent at 413 pence at 1035 GMT.

Shares of the company, which has a market value of about 970 million pounds ($1.46 billion), have gained more than 20 percent since the company reported full-year results in November.

(Reporting by Roshni Menon in Bengaluru; Editing by Gopakumar Warrier and Ted Kerr)

UDG Healthcare expects 5-8 percent rise in full-year EPS