United Drug set for strong growth

United Drug expects to post "double-digit growth" in both operating profit and earnings for the six months to the end of March. In a trading update issued yesterday, the company also said "the strength of its current trading performance" should continue into the second half.

The news provided comfort for analysts, who mostly left their forecasts unchanged yesterday. Ian Hunter, an analyst with Goodbody Stockbrokers, said any surprises at the company over the near term were likely to be "on the upside". He expects growth of 12.3 per cent in adjusted earnings for 2006.

United Drug said three acquisitions completed in the second half of 2005 - In2Focus, TD Packaging and Presearch - were now established within the group and were "on target" to achieve their first-year numbers.

The group, which is best known for its pharmaceutical wholesaling business, also noted it was well supported by consumption within its core markets. In wholesaling it is achieving market share gains in a growing market, with the business growing by almost 12 per cent in the Republic and by mid-single digits in the North.

In a conference call, United Drug chief executive Liam Fitzgerald confirmed that talks had begun between the Health Services Executive and pharmaceutical suppliers on the Republic's drug pricing review. He said there was "no visibility as yet", but that a new arrangement could be in place "by the end of the summer months".