United Drug said it plans to buy back as much as 5 million shares after the company reported an increase in pre-tax profit in the six months to March 31st.

Group revenue for first half of the year was €894 million, a 5 per cent rise compared to the same period in 2010. Operating profit was up 6 per cent to €37 million, while pretax profit gained 4 per cent year on year to €32.7 million.

The group's non-Irish operations also made progress, with the US packaging business putting in a strong performance and its homecare joint venture with Medco integrating its recent acquisition of UK based pharmacy homecare company Careology.

Chief executive Liam FitzGerald said it soperations outside of Ireland contributed more than 65 per cent of profit in the period under review, with the US alone accounting for over 20 per cent of operating profit.

"This has been particularly important in the period as these increased contributions have more than offset the impact that the continued challenging regulatory climate has on revenues in some of our Irish businesses," he said.

He said the group is in "active discussions" with a number of potential acquisitions and "could comfortably" spend €150 million a year. The size of takeover targets range from "bolt-on acquisitions to more substantial strategic plays", Mr FitzGerald said.

The company said it still expects operating profit for the year through September to be "ahead of last year on a constant currency basis."