Leadership

United Drug reports ‘sucessful’ Q1, but drug deal will hit revenue

09.02.2010
United Drug has said trading across the group has been “good” during the first quarter of its financial year, and well ahead of what it described as a “slow” first quarter in 2009.

The healthcare management company said in an interim management statement issued ahead of its AGM in Dublin later today that those areas of its business performing below expectations during 2009 are now back trading in line with budget.

Internally generated cash flows continue to be strong across the group, United Drug added.

The company said overall profits in its Healthcare Supply Chain division are ahead of last year during the quarter to the end of December 2009, the company said.

It added that the introduction in January 2009 of a previously announced reduction in the price of off-patent medicines in the Republic of Ireland means that overall revenues for the period are in line with those in the same period in the prior year.

However, United Drug noted that the new deal recently agreed between the Irish Department of Health and pharmaceutical manufacturers, and which came into effect on 1 February 2010, will see a 40pc reduction in the price of off-patent medicines and will therefore impact on the revenues of its Irish wholesale business in the current year.

United Drug also said it Medical & Scientific business, had performed in line with budget during the quarter. While capital spending in hospitals remains slow both in the UK and Ireland, the business is seeing good new business opportunities and has already had a positive contribution from its newly established operation in Sweden, the company said.

Overall, United Drug concluded it had seen a “successful” first quarter, and said the trading outlook for most parts of the business is “encouraging”.

After taking account of the new deal on medicine prices in the Republic of Ireland, and the company’s investment in a UK homecare joint venture, United Drug said it expects profit before tax for the year to 30 September 2010 to be broadly in line with the prior year.