Full year guidance and interim dividend reinstated
5 August 2020: UDG Healthcare plc (“the Group”), a leading international provider of healthcare services, issues the following trading update covering the period from 1 April 2020 to 30 June 2020.
From the outset of the COVID-19 pandemic the Group’s priority first and foremost has been on protecting the health and wellbeing of our people and serving our clients. The significant commitment and dedication of our employees across the various business units and geographies has allowed us to continue to service our clients through this challenging period. In Ashfield, the majority of our employees continue to service clients effectively while working remotely. Sharp’s facilities continue to operate with a range of health and safety measures in place and appropriate social distancing.
Group outlook – Guidance reinstated
UDG Healthcare remains a strong and well-diversified business, supported by excellent long-term market fundamentals. While some parts of our operations have been impacted by the pandemic and we continue to respond as required, the strong market positions and resilience demonstrated across the majority of the business leave the Group well positioned for the future.
In April 2020, the Group suspended its financial guidance for FY20, in response to uncertainty due to COVID-19. While some uncertainty remains, given the improvement in visibility across the divisions, the Group is reinstating financial guidance for FY20. The Group expects adjusted diluted earnings per share (EPS)1, for the year to 30 September 2020 to be between 43 $ cent and 45 $ cent.
This financial guidance assumes no material increase in current COVID-19 related restrictions.
1 Before the amortisation of acquired intangible assets, transaction costs and exceptional items
Quarter to 30 June 2020
Following a strong first half, as expected the pandemic had an adverse impact on trading during the third quarter to 30 June 2020, and Group constant currency profit before tax for the quarter was below the same period last year.
Ashfield’s operating profit was well behind the same quarter last year. As indicated at the time of the Group’s interim results announcement in May 2020, in-field activities (including the Meetings and Events business, field-based representatives and audit services in STEM) were the most impacted by COVID-19. Despite the tough backdrop, the remainder of Ashfield performed well, harnessing digital and technology solutions to serve our clients.
Sharp traded very strongly during the quarter with operating profit significantly ahead of the same quarter last year. Growth was achieved across all parts of the business driven by continued strong demand, improving mix effect and operational improvements as the business adapted well to the challenges presented by the pandemic.
The Group is pleased to announce that Sharp has completed a $37.5 million investment for a 25% shareholding (with an option to acquire the remaining 75% shareholding) in Berkshire Sterile Manufacturing Inc, a Massachusetts based sterile packaging and manufacturing services business. This investment further expands Sharp’s capabilities into sterile fill/finish manufacturing and is highly complementary to its existing clinical trial, packaging and related services.
Nine months to 30 June 2020 ahead of prior year
Notwithstanding the challenges faced during the third quarter, Group constant currency profit before tax for the nine months to 30 June 2020 remained ahead of the prior year reflecting principally the benefits of acquisitions completed in 2019 and modest underlying growth.
Robust balance sheet, liquidity & dividend
The Group’s financial position remains robust with a strong balance sheet and liquidity position.
At the time of the April 2020 trading update, the Board took the decision to suspend the interim dividend for H1 FY20. The Board has kept this decision under review, and taking into account the Group’s strong liquidity position and improved trading visibility, has declared an interim dividend of 4.46 $ cent per share, in line with the 2019 interim dividend. The interim dividend is payable to shareholders on UDG Healthcare plc’s register at 5.00 pm on 21 August 2020 and will be paid on 15 September 2020.
The Board continues to keep the decision to pay a final dividend for the full year to 30 September 2020 under review and will provide a further update in November 2020 as part of the Group’s FY20 preliminary results, taking into account market conditions at that time.
Board and management appointments
As announced in the Group’s 2019 Annual Report, Peter Gray will retire as Chair and a Director of the Board on 30 September 2020. Following the completion of a thorough selection process led by the Senior Independent Director, the Board is pleased to announce the appointment of Shane Cooke as Chair with effect from 1 October 2020. Shane joined the Board on 1 February 2019 and has extensive experience, both executive and non-executive, in the pharmaceutical and life science sectors, both in Europe and in the United States. Please see separate RNS released today for further information.
In addition, the Group announces the appointment of Ryan Quigley as Chief Operating Officer of UDG Healthcare plc. Ryan will join the Group on 14 September 2020. Ryan will have responsibility for driving long-term strategic growth including increasing collaboration within Ashfield and Sharp. Ryan has over 25 years’ experience in the pharmaceutical industry in commercial leadership roles, including most recently at AbbVie and previously at Pfizer, Bristol Myers Squibb and AstraZeneca.
Date of preliminary results
The Group expects to issue its preliminary results for the twelve months to 30 September 2020 on Tuesday 24 November 2020.
UDG Healthcare plc will host a conference call for investors and analysts at 9am (BST) today, Wednesday 5 August to discuss this statement. Participants can register in advance of the call for dial-in details at the following link:
A playback facility will be available for seven days on +44 (0)1212604862. The access code for the replay will be 6331787.
This announcement contains inside information for the purposes of Article 7 of EU Regulation 596/2014.
Investors and Analysts:
Head of Investor Relations, Strategy & Corporate Communications
UDG Healthcare plc
Tel: + 353 (0) 1 468 9000
Lisa Kavanagh / Eavan Gannon
Tel: + 44 (0) 207 250 1446
About UDG Healthcare plc:
UDG Healthcare plc (LON: UDG) is a FTSE 250 global leader in the healthcare advisory, communications, commercial, clinical and packaging services industries. UDG employs 9,000 people across operations in 29 countries, delivering services in over 50 countries.
Operating across two divisions, Ashfield and Sharp, UDG provides outsourced services which enable over 300 healthcare companies from large pharmaceutical to small biotech to bring their products to market.
Ashfield is a global leader in commercialisation services for the pharmaceutical and healthcare industry, operating across three business areas: Advisory, Communications and Commercial & Clinical. The division focuses on supporting patients to access and adhere to their medications and educating and communicating effectively with healthcare professionals and patients on these products at all stages of the product life cycle. Ashfield provides strategic consulting, advisory services, patient solutions, scientific and creative communications, PR, on-demand advertising services, field and contact centre sales teams, and medical information and event management services.
Sharp is a global leader in contract commercial packaging, clinical, manufacturing and technology services for the pharmaceutical and biotechnology industries, operating from eight state-of-the-art facilities in the US and Europe.
For more information, please go to: www.udghealthcare.com
FORWARD LOOKING STATEMENTS
Some statements in this announcement are or may be forward looking statements. In particular, any statements that express forecasts, expectations and projections with respect to future matters, including trends in results of operations, margins, growth rates, overall market trends, the impact of interest or exchange rates, the availability of financing, anticipated cost savings and synergies and the execution of the Group’s strategy, are forward looking statements. They represent expectations for the Group’s business, including statements that relate to the Group’s future prospects, developments and strategies, and involve risks and uncertainties both general and specific, because they relate to events and depend upon circumstances that will occur in the future. The Group has based these forward looking statements on assumptions regarding present and future strategies of the Group and the environment in which it will operate in the future. However, because they involve known and unknown risks, uncertainties and other factors including but not limited to general economic, political, financial, health, security and business factors, as well as international, national and local conditions which are beyond the Group’s control, actual results, performance, operations or achievements expressed or implied by such forward looking statements may differ materially from those expressed or implied by such forward looking statements and accordingly you should not rely on these forward looking statements in making investment decisions. Any forward looking statements speak only as of the date they are made and, except as required by applicable law or regulation, neither the Group nor any other party intends to update or revise these forward-looking statements after the date these statements are published, whether as a result of new information, future events or otherwise. Nothing in this document should be construed as a profit forecast. UDG Healthcare plc and its directors accept no liability to third parties.