Higher interest rates drag on profits at Uniphar despite growth

Rising interest rates and costs associated with the integration of newly acquired companies led to a decline in profits at Uniphar in the first half of the year despite a strong trading period for the healthcare group in which it met its medium-term growth target.

Revenues at the Dublin-listed business, which accounts for more than 20 per cent of the Irish retail pharmacy market, jumped 25 per cent between January and June to almost €1.24 billion, reflecting growth across all its divisions, Uniphar said in its interim results on Thursday.

Adjusted earnings climbed 13.8 per cent compared with the first six months of 2022 to €51.1 million, meaning the group met its goal of doubling earnings within five years of Uniphar’s initial public offering.

Uniphar also announced a new medium-term growth target of growing adjusted earnings to to €200 million.

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However, the group said before-tax profits declined 12.7 per cent over the period to €22.8 million, with group adjusted earnings per share decreasing from 8.4 cent to 7.4 cent. The decline reflected “increased financing costs” and charges related to acquisition integration and business transformation costs.

“Uniphar performed in line with expectations delivering strong underlying growth offset by higher interest costs,” the company said in a statement.

Uniphar announced plans to restructure its business divisions that will see its pharmacy division combined with its product access division to create Uniphar Pharma. Uniphar’s medtech unit will also become a standalone division within the group.

Four years after IPO, Uniphar chief executive Ger Rabbette said the business is now focused on its next phase of growth, “reorganising our divisions to reflect our strategic ambitions and accelerating our progress in our target markets”.

He said the group will also make a “significant investment” in its IT systems in the near term to help meet the new growth target.