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UDG Udg Healthcare Public Limited Company

1,079.00
0.00 (0.00%)
28 Mar 2024 - Closed
Delayed by 15 minutes
Share Name Share Symbol Market Type Share ISIN Share Description
Udg Healthcare Public Limited Company LSE:UDG London Ordinary Share IE0033024807 ORD EUR0.05 (CDI)
  Price Change % Change Share Price Bid Price Offer Price High Price Low Price Open Price Shares Traded Last Trade
  0.00 0.00% 1,079.00 1,078.00 1,079.00 0.00 00:00:00
Industry Sector Turnover Profit EPS - Basic PE Ratio Market Cap
0 0 N/A 0

UDG Healthcare Public Limited Co. Half-year Report (6639Y)

19/05/2016 7:01am

UK Regulatory


Udg Healthcare Public (LSE:UDG)
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TIDMUDG

RNS Number : 6639Y

UDG Healthcare Public Limited Co.

19 May 2016

UDG Healthcare plc

Interim Report 2016

Another period of strong growth

19 May 2016: UDG Healthcare plc ("UDG Healthcare" or "Group"), a leading international healthcare services provider, announces its results for the six months to 31 March 2016 after another period of financial and strategic progress for the Group.

 
 
                                                                                      Constant 
                                                                                      currency 
                                                                                      increase     Increase 
                      IFRS based     Adjustments(1)                  Adjusted               on      on 2015 
                                                                                          2015 
                           EUR'm              EUR'm                     EUR'm                %            % 
 Continuing 
 operations 
 Revenue                   472.4                  -                     472.4                2            6 
 Operating profit           40.3                8.1                      48.4                9           15 
 Profit before 
  tax                       33.1                8.1                      41.2               10           18 
 Diluted earnings 
  per share 
  (cent)                    9.86               2.91                     12.77                8           15 
 
  Discontinued 
  operations(2) 
 Profit after tax            7.0                4.0                      11.0               10           10 
 Diluted earnings 
  per share 
  (cent)                    2.82               1.64                      4.46                8            9 
 
 Total diluted 
  earnings 
  per share 
  (cent)                   12.68               4.55                     17.23                8           13 
 
 Dividend per 
  share 
  (cent)                    3.05                  -                      3.05                5            5 
-----------------  -------------  -----------------  ------------------------  ---------------  ----------- 
 
                                                                           31 
                        31 March       30 September                     March 
                            2016               2015                      2015 
 
 Net debt (EUR'm)          228.0              195.8                     274.9 
 Net 
  debt/EBITDA(3) 
  (times)                   1.63               1.42                      2.02 
-----------------  -------------  -----------------  ------------------------  ---------------  ----------- 
 
 

Non-GAAP information

The Group reports certain financial measures that are not required under International Financial Reporting Standards (IFRS) which represent the generally accepted accounting principles (GAAP) under which the Group reports. The Group believes that the presentation of these non-GAAP measures provides useful supplemental information which, when viewed in conjunction with our IFRS financial information, provides investors with a more meaningful understanding of the underlying financial and operating performance of the Group and its divisions. These measures are also used internally to evaluate the historical and planned future performance of the Group's operations and to measure executive management's performance based remuneration. Reference to these performance measurements throughout this report are to the adjusted measurements unless otherwise stated.

(1) Adjusted operating profit, profit before tax and diluted EPS from continuing operations are stated before the amortisation of acquired intangible assets (EUR7.3m, pre-tax) and transaction costs (EUR0.8m, pre-tax).

Adjusted profit after tax from discontinued operations is stated after charging depreciation and amortisation of assets classified as held for sale (EUR3.5m, net of tax) and adding back transaction costs (EUR7.5m, net of tax). Profit after tax in the comparative period reflected a depreciation and amortisation charge of EUR3.6m, net of tax, relating to assets forming part of the discontinued operations. Under IFRS, depreciation and amortisation are not charged on assets classified as held for sale, therefore, no equivalent depreciation and amortisation has been charged on these assets in the current period's results. To provide comparable information on the performance of the discontinued operations, an estimated charge of EUR3.5m (net of tax) for depreciation and amortisation in the current period has been reflected in the adjustments column above.

(2) The discontinued operations include United Drug Supply Chain Services, United Drug Sangers, TCP Group and MASTA. These operations were included in the Group's proposed disposal which was announced on 18 September 2015 and completed on 1 April 2016.

(3) EBITDA of continuing and discontinued operations before any exceptional items and transaction costs for the preceding twelve months, including annualised EBITDA of companies acquired and less EBITDA of completed disposals. There were no exceptional items, acquisitions or disposals in H1 2016.

Chief Executive's comment

Commenting on the interim performance, UDG Healthcare plc Chief Executive Officer, Brendan McAtamney said:

"The Group's continuing business delivered another period of strong growth during H1 2016. Profit before tax increased by 18% (10% on a constant currency basis) and earnings per share increased by 15% (8% on a constant currency basis) due to a combination of robust underlying growth and the benefit of currency movements.

Sharp's operating profit increased by 38% during the period while Ashfield increased operating profit by 7%. The continuing Group operating margin increased from 9.4% to 10.2%, with each division increasing its operating margin during the period.

We are reiterating our full year market guidance of 6-8% EPS(1) growth for the continuing Group on a constant currency basis.

The Group's activities and strategy continue to be supported by the strong growth outlook for the outsourced healthcare services market. Following the completion of the disposal of the United Drug Supply Chain businesses and MASTA in April, the Group is now in a net cash position. Underpinned by our strong balance sheet and diversified client base, UDG Healthcare remains well positioned to continue to execute our international expansion strategy and meet the growing demand for our specialist services from our global healthcare clients."

Financial highlights (continuing Group only)

-- Adjusted operating profit(1) growth of 15% (9% on a constant currency basis) to EUR48.4 million, with profit

before tax(1) up 18% (10% on a constant currency basis).

-- Adjusted diluted earnings per share(1) (EPS) from continuing operations increased by 15% (8% on a constant

currency basis).

-- Revenue up 6%. Net revenue up 9% compared to prior period on a constant currency basis, excluding pass

through costs and adjusting for disposals.

-- Operating margin(1) increased from 9.4% to 10.2%. Net operating margin(2) increased from 11.1% to 11.6%.

   --    5% increase in interim dividend to 3.05 cent per share. 

-- Reiterating our full year market guidance of 6-8% EPS growth for the continuing Group on a constant

currency basis.

Strategic & operating highlights

   --    Disposal of the United Drug Supply Chain businesses and MASTA completed on 1 April 2016. 

-- Ashfield's operating profit increased by 7% (underlying growth of 7%), with positive underlying growth

evident across the division.

-- The Group acquired Pegasus Public Relations Limited in April 2016, for an initial consideration of StgGBP10.1

million with an additional StgGBP6.7 million payable, based on the achievement of agreed profit targets over the

next three years. Pegasus is a UK-based healthcare communications business, complementing the existing

services provided by Ashfield Healthcare Communications.

-- Sharp Packaging's operating profit increased by 38% (underlying growth of 25%) driven by continued strong

momentum in the US business.

-- Sharp US' capacity expansion has been completed providing an additional 30% capacity once fully

validated.

-- The Group's Supply Chain Services businesses (including discontinued operations) traded in line with

expectations.

(1)    Before the amortisation of acquired intangible assets and transaction costs. (2)    Operating margin as a percentage of net revenue. Net revenue represents gross revenue adjusted for revenue associated with pass-through costs for which the Group does not earn a margin. 

Group development and outlook

The Group reiterates its full year guidance for constant currency adjusted diluted EPS(1) growth for the continuing Group of 6 - 8% based on both the current momentum and positive outlook for the remainder of 2016. EPS guidance is unchanged because the positive impact from the acquisition of Pegasus is offset by the impact of allocating an extra three months central administration costs to the continuing Group in 2016, due to the earlier than expected completion of the disposal of the United Drug Supply Chain businesses and MASTA.

The Group is now in a net cash position after the receipt of the disposal proceeds in April from the sale of the United Drug Supply Chain businesses and MASTA.

To complement the underlying profit growth being generated by the businesses, the Group remains active from a corporate development perspective. The Group's focus will continue to be on executing strategic M&A opportunities complementary to our market leading, high-growth businesses, Ashfield and Sharp.

The build and fit out of Sharp's new packaging facility in Allentown, Pennsylvania was completed in April 2016, and the first phase of packaging suites will become operational during the second half of 2016. Once fully validated and operational, the investment at this site will increase US commercial packaging capacity by approximately 30%.

The Group remains focused on ensuring that scalable infrastructure is in place to support the future organic and acquisition led growth of the business, through its "Future Fit" initiatives. The first phase of this project will incorporate the implementation of a Groupwide Human Resource Information System, which is anticipated to go live during the second half of 2017 with a total capital investment of EUR12 million. Further projects will be focused on the Group's finance and IT infrastructure.

The average 2015 financial year exchange rates were EUR1 = GBP0.7428 and $1.1482. The average exchange rates during H1 2016 were EUR1 = GBP0.7456 and $1.0986 (H1 2015 EUR1 = GBP0.7670 and $1.1899).

As previously guided, the Group expects to continue its long history of dividend growth in FY16. The Board has declared an interim dividend of 3.05 cent per share, a 5% increase on the 2015 interim dividend.

Preliminary results:

The Group will issue preliminary results for the year to 30 September 2016 on Thursday, 24 November 2016.

(1) before the amortisation of acquired intangible assets and transaction costs.

Analyst presentation:

A presentation for investors and analysts will be held at the London Stock Exchange at 9.00 GMT today, Thursday, 19 May 2016. If you wish to attend, please contact Powerscourt. Alternatively, to dial into the conference call or webcast, the details are as follows:

Audio webcast

http://edge.media-server.com/m/p/3w8qtbpi

Conference call

UK number: + 44-203-427-1907

Ireland number: + 353-1-246-5601

US number: + 1-212-444-0412

Participant code: 9775904

If you wish to ask questions, please do so via the conference call.

A replay of the audio webcast can be accessed via the same webcast link above.

Review of Operations

for the six months to 31 March 2016

Ashfield Commercial & Medical Services(1)

 
  Six months to 31 March          2016    2015   Change 
                                 EUR'm   EUR'm 
------------------------------  ------  ------  ------- 
 Gross revenue 
   UK                            126.2   125.0       1% 
   North America                  94.5    89.6       5% 
   Europe                         70.5    69.0       2% 
 Total gross revenue             291.2   283.6       3% 
 
 Net revenue (2) 
   UK                             98.3    97.4       1% 
   North America                  77.1    60.9      27% 
   Europe                         60.5    56.5       7% 
 Total net revenue               235.9   214.8      10% 
 
 Operating profit 
   UK (incl Japan)                15.8    14.2      11% 
   North America                   7.4     7.6     (3%) 
   Europe                          4.8     4.4       9% 
 Total operating profit           28.0    26.2       7% 
 
   Operating margin 
 Operating margin (on gross 
  revenue)                        9.6%    9.2% 
 Net operating margin (on net 
  revenue)                       11.9%   12.2% 
------------------------------  ------  ------  ------- 
 

(1) Excludes MASTA in 2016 and 2015 as it was included in the proposed disposal announced on 18 September 2015 and completed on 1 April 2016.

(2) Net revenue represents gross revenue adjusted for revenue associated with pass-through costs for which the Group does not earn a margin. There are no pass-through costs in Sharp Packaging Services or Supply Chain Services.

Trading across the Ashfield division was good, with H1 2016 net revenue up 10% to EUR235.9m and operating profit up 7% to EUR28.0m.

Adjusting for the benefit of favourable currency movements and the impact of the 2015 disposal of the non-core Speaker Bureau business, Ashfield generated underlying operating profit growth of 7% during the period. Operating margin in the period was 9.6%, whilst net operating margin (allowing for pass-through costs) was 11.9%.

UK operating profit increased by 11% and net operating margin by 152bps during the period. This was primarily due to continued good progress in healthcare communications and an increased contribution from the Japanese joint venture, offsetting a weaker performance from the UK commercial business which operates in a more mature market.

Reported operating profit for North America was 3% behind the prior period. Adjusting for the impact of the disposal of the Speaker Bureau business during 2015, operating profit in North America grew by 15% during the period including the benefit of favourable currency movements.

European operating profit increased by 9% during H1 2016 with a net operating margin of 7.9%.

Sharp Packaging Services

 
  Six months to 31 March                       2016    2015   Change 
                                              EUR'm   EUR'm 
-------------------------  ------------------------  ------  ------- 
 Revenue 
  US                                          108.2    84.7      28% 
 EU                                            24.2    25.7     (6%) 
 Total revenue                                132.4   110.4      20% 
 
 Operating profit/(loss) 
  US                                           16.5    12.0      38% 
 EU                                           (0.3)   (0.3)        - 
 Total operating profit                        16.2    11.7      38% 
 Operating margin                             12.2%   10.6% 
-------------------------  ------------------------  ------  ------- 
 

Sharp Packaging Services continued its strong financial performance during H1 2016 with revenue increasing by 20% to EUR132.4m and operating profit up 38% to EUR16.2m. The division generated underlying constant currency operating profit growth of 25% and benefited from favourable currency movements during the period. Operating margin increased significantly (+163bps) to 12.2% during the period.

The Sharp US business continued to deliver strong growth. Revenue increased by 28% compared to the prior period, while operating profit increased by 38% to EUR16.5m due to continued strong market demand dynamics across all packaging formats. Operating margin in the US increased to 15.2% (+111bps) driven by continued high utilisation rates.

The build and fit out of the new biotech packaging facility at our Allentown campus in Pennsylvania has been completed. This will provide an additional 30% capacity for the US commercial packaging business once fully validated. The first phase of packaging suites is becoming operational and this additional capacity will allow the business to meet the growing market demand which is evident across all packaging formats in the US business. The Group anticipates that further capacity investments may be required into the medium term to meet growing client demand.

Sharp Europe continues to trade close to a breakeven position. Despite a realignment of the cost base and improved business development efforts, the European packaging business continues to have capacity in excess of current requirements. Addressing this excess capacity remains a key priority for the business.

Demand for serialisation services continues to increase. We continue to invest in serialisation capabilities in advance of the regulatory requirement for prescription products to be serialised from November 2017 in the US and Europe in 2019. We have now enabled over 40% of our packaging lines with serialisation capability and have worked on over 30 serialisation projects with existing clients. We will continue to enable the remainder of the US prescription packaging lines over the coming twelve months to ensure the business is fully prepared to meet our clients' serialisation requirements.

Supply Chain Services (continuing)(1)

 
 Six months to 31 March     2016    2015   Change 
                           EUR'm   EUR'm 
------------------------  ------  ------  ------- 
 Revenue                    48.8    52.2     (7%) 
 Operating profit            4.2     4.1       2% 
 
 Operating margin           8.6%    7.8% 
------------------------  ------  ------  ------- 
 

(1) Excludes United Drug Supply Chain Services, United Drug Sangers and TCP Group in 2016 and 2015 as they were included in the proposed disposal announced on 18 September 2015 and completed on 1 April 2016.

Continuing operations include Aquilant and the joint venture with Medicare.

Revenue was 7% behind the prior period, however, adjusting for the closure of Aquilant's UK laboratory distribution business in February 2015, underlying revenue was in line with the prior period. Operating profit was 2% ahead of the prior period and operating margin increased to 8.6%.

Aquilant renewed a number of important client contracts during the period and continues to trade in line with expectations.

Discontinued operations

 
 Six months to 31 March     2016    2015   Change 
                           EUR'm   EUR'm 
------------------------  ------  ------  ------- 
 Revenue                   682.9   685.2     (0%) 
 Profit after tax(2)        11.0    10.0      10% 
 
 

(2) Profit after tax from discontinued operations is stated before amortisation of acquired intangible assets, transaction costs and exceptional items. Profit after tax in the comparative period reflected a depreciation and amortisation charge of EUR3.6m, net of tax, relating to assets forming part of the discontinued operations. Under IFRS, depreciation and amortisation are not charged on assets classified as held for sale, therefore, no equivalent depreciation and amortisation has been charged on these assets in the current period's results. To provide comparable information on the performance of the discontinued operations, an estimated charge of EUR3.5m (net of tax) for depreciation and amortisation in the current period has been reflected above. See note 8 for further details.

On 1 April 2016 the Group completed the disposal of United Drug Supply Chain Services, United Drug Sangers, TCP Group and MASTA. These businesses are treated as discontinued operations and have performed in line with expectations for the period.

Forward-looking information

Some statements in this announcement are forward looking. They represent expectations for the Group's business, and involve risks and uncertainties. The Group has based these forward-looking statements on current expectations and projections about future events. The Group believes that expectations and assumptions with respect to these forward-looking statements are reasonable. However, because they involve known and unknown risks, uncertainties and other factors, which in some cases are beyond the Group's control, actual results or performance may differ materially from those expressed or implied by such forward-looking statements.

 
 For further information, please contact: 
 Investors and Analysts: 
  Alan Ralph                     Keith Byrne 
  CFO                            Head of Investor Relations 
  UDG Healthcare plc             and Strategy 
  Tel: +353-1-463-2300           UDG Healthcare plc 
                                 Tel: + 353-1-463-7722 
 

Media:

Business / Financial media:

Lisa Kavanagh / Jack Hickey

Powerscourt

Tel: +44-207-250-1446

About UDG Healthcare plc:

Listed on the London Stock Exchange, UDG Healthcare plc (LON: UDG) is a leading international provider of services to the healthcare industry, employing over 7,000 employees at operations across 19 countries including the US, UK, Ireland and Germany.

UDG Healthcare plc operates across three divisions: Ashfield Commercial & Medical Services, Sharp Packaging Services and Supply Chain Services.

Ashfield Commercial & Medical Services is a global leader in the provision of sales, marketing and healthcare communications services to pharmaceutical clients. It focuses on supporting healthcare professionals and patients at all stages of the product life cycle enabling improved compliance and clinical outcomes. The division provides sales teams, healthcare communications, telesales, nurse educators, medical information, pharmacovigilance, regulatory and event management services to over 300 healthcare companies in 18 countries.

Sharp Packaging Services is a global leader in contract packaging and clinical trial packaging services for pharmaceutical clients, operating from state of the art facilities across the US and Europe. Sharp is also a world leader in 'Track and Trace' serialisation services, which will require all prescription drugs to have a unique serial code for authentication and traceability.

Supply Chain Services consists of Aquilant, a leading provider of outsourced sales, marketing, distribution and engineering services to the medical and scientific sectors in the UK, Ireland and the Netherlands and our interest in Medicare, a pharmacy chain in Northern Ireland.

The company is listed on the London Stock Exchange and is a constituent of the FTSE 250.

For more information please go to: www.udghealthcare.com

Finance Review

for the six months to 31 March 2016

Revenue

Revenue from continuing operations of EUR472.4 million for the six months to 31 March 2016 was 6% ahead (2% on a constant currency basis) of the same period in 2015. Ashfield Commercial & Medical Services reported revenue 3% ahead of the prior period (up 10% excluding pass through revenue) and Sharp Packaging Services reported revenue 20% ahead of the prior period. The continuing Supply Chain Services divisional revenue was 7% down on 2015 due to the closure of Aquilant's UK laboratory distribution business in February 2015.

Adjusted operating profit

Adjusted operating profit from continuing operations of EUR48.4 million is 15% ahead (9% on a constant currency basis) of H1 2015.

Adjusted operating margin

The adjusted operating margin for the continuing businesses for the period of 10.2% was higher than the margin of 9.4% in H1 2015. This continues the upward trend in operating margin in recent years as the Group focuses on operating efficiencies and achieving faster growth from businesses with higher operating margins.

Adjusted profit before tax

Net interest costs for the period of EUR7.1 million are 2% higher than H1 2015. This delivered a profit before tax from continuing operations of EUR41.2 million which is 18% ahead of 2015 (10% on a constant currency basis). Further details on the principal exchange rates used are provided in note 17.

Taxation

The effective taxation rate(1) on continuing operations has increased from 22.1% in H1 2015 to 23.5% in H1 2016. This is because a larger proportion of profit has been generated in countries with higher taxation rates.

Adjusted diluted earnings per share

Earnings per share from continuing operations is 15% ahead (8% on a constant currency basis) of H1 2015 at 12.77 cent. On a combined continuing and discontinued basis, adjusted diluted earnings per share increased by 13% to 17.23 cent.

Cash flow

Net debt increased by EUR32.2 million in the period to EUR228.0 million (31 March 2015: EUR274.9 million). The net cash inflow from operating activities was EUR26.3 million with EUR36.6 million being generated by continuing operations and an outflow of EUR10.3 million from discontinued operations.

EUR19.0 million was invested in our continuing operations in property, plant and equipment and computer software. This includes IT investment to enable our businesses to grow in an efficient manner and investment in the new facility in Sharp Packaging US. EUR5.3 million was paid in deferred consideration associated with prior year acquisitions while EUR19.9 million relating to the final 2015 dividend was paid during the period.

Balance sheet

Net debt at the end of the period was EUR228.0 million. The net debt to annualised EBITDA ratio is 1.63 times and net interest is covered 12.6 times by annualised EBITDA. Financial covenants in our principal debt facilities are based on net debt to EBITDA being less than 3.5 times and EBITDA interest cover being greater than three times.

Return on capital employed

The ROCE for continuing operations was 13.6%, up from 13.5% at the end of 2015.

The Group targets ROCE of 15% within three years for all investments. The Group has invested significantly in acquisitions and capital expenditure in recent years and we anticipate that organic growth in future years will increase Group ROCE to the targeted 15% level.

[1] Before the amortisation of acquired intangible assets, transaction costs and 2015 exceptional items.

Dividends

The directors are proposing an interim dividend of 3.05 cent per share representing an increase of 5% on the 2015 interim dividend. The interim dividend is payable to shareholders on the Company's register at 5.00 pm on 27 May 2016 and will be paid on 20 June 2016.

Investor relations

UDG Healthcare's senior management team spend a significant amount of time meeting with shareholders and the international financial community. We have invested in dedicated investor relations resources and are focused on increasing the awareness of the Company among the investor and analyst community.

We communicate regularly with our shareholders throughout the year, specifically following the release of our interim and preliminary results, and at the time of major developments. Our website www.udghealthcare.com, is the primary method of communication for the majority of our shareholders. We publish our annual report, preliminary results and other public announcements on our website. In addition, details of our conference calls and presentations are available through our website.

The Board of Directors considers it important to understand the views of shareholders and receive regular updates on investor perceptions.

Our investor relations department provides a point of contact for shareholders and full contact details are set out in the investor relations section of our website. Shareholders can also submit an information request through the shareholder services section of our website.

Principal risks and uncertainties

The Transparency (Directive 2004/109/EC) Regulations 2007 require the disclosure of the principal risks and uncertainties which could have a material impact on the Group's performance over the remainder of the financial year.

The Group operates within a highly regulated environment and the expectations of our key stakeholders, which include our clients and regulators, are very high. Our services include communicating to healthcare professionals, appropriate product use, pharmaceutical packaging and the distribution of pharmaceutical products for normal use or clinical trials. We focus on making sure that we deliver these services correctly and in a compliant way. However, failure to do so could result in adverse consequences for patients and our clients, so the risks that we face in delivering our services are potentially significant.

The Group's ability to avoid or mitigate these risks is underpinned by detailed risk registers maintained by each of the Group's divisions and business units. These risk registers identify the risks, as well as the plans for addressing them, and the consolidated Group risk register is reviewed by the executive directors on a regular basis. The consolidated risk register is also reviewed by the Risk, Investment and Finance Committee and the Chairman of that committee reports to the Board on the outcome of each review.

The principal risks and uncertainties identified by the risk management process as facing the Group are detailed below:

 
 Principal risk                         Mitigation 
-----------------------------------    -------------------------------------- 
 
   Operational risks 
-----------------------------------    -------------------------------------- 
 Acquisitive growth remains             All potential acquisitions 
  a core element of the                  are assessed and evaluated 
  Group's strategy. A failure            to ensure the Group's defined 
  to execute and properly                strategic and financial 
  integrate acquisitions,                criteria are met. A discreet 
  capitalise on the synergies            integration process is 
  they bring and/or maintain             developed for each acquisition. 
  and develop their talent               This process is supported 
  pool, may adversely affect             by experienced management 
  the Group.                             with a view to achieving 
                                         identified benefits, cultivating 
                                         talent and minimising general 
                                         and specific integration 
                                         risks. 
-----------------------------------    -------------------------------------- 
 As the Group's activities              At each business review 
  consolidate and further                we monitor our client base 
  acquisitions are completed,            and the threats and opportunities 
  the Group's client base                that may arise, both from 
  may become more concentrated           our clients' activities 
  making the Group more                  and any concentration of 
  susceptible to competitive,            our client base. The impact 
  client merger or procurement           that any potential acquisition 
  led threats.                           may have on client concentration 
                                         is considered as part of 
                                         the acquisition assessment 
                                         process. 
-----------------------------------    -------------------------------------- 
 The Group has many legal               Maintenance of legal, regulatory 
  and regulatory obligations,            and quality standards is 
  including in respect of:               a core value of the Group. 
  (a) protection of patient              We continue to build and 
  information (such as HIPAA);(b)        review our quality and 
  patient and employee health            compliance management systems 
  and safety; and(c) promotional         to ensure that they are 
  spend. In addition many                fit for purpose in the 
  of the Group's activities              context of the Group's 
  are subject to stringent               strategy and its legal 
  licensing regulations.                 and regulatory obligations. 
  A failure to meet any                  These reviews are supported 
  of these could result                  by corporate audits on 
  in products and services               compliance, quality and 
  being defective, harming               environment, health and 
  patients and/or giving                 safety. 
  rise to very significant 
  liability. 
-----------------------------------    -------------------------------------- 
 Throughout the Group medicines         Packaging and supply activity 
  and medical devices can                is carried out under licence 
  be packaged, supplied                  and a contract with the 
  or administered directly               marketing authorisation 
  to patients. The risk                  holder (MAH). This requires 
  of inappropriate packaging,            a regulated quality management 
  supply or administration               system to ensure the integrity 
  could lead to a negative               of the packaged product 
  patient experience.                    and the supply chain. Administration 
                                         of medicines to patients 
                                         is covered by a detailed 
                                         client contract with the 
                                         MAH and the local clinical 
                                         governance framework. All 
                                         of these processes are 
                                         subject to risk assessment, 
                                         training, management review, 
                                         internal and external audits. 
 The success of the Group               The talent requirements 
  is built upon effective                of the Group are monitored 
  management teams that                  to ensure its management 
  consistently deliver superior          teams meet prevailing requirements 
  performance. If the Group              in skills, competencies 
  cannot attract, retain                 and performance. Remuneration 
  or develop suitably qualified,         policies, management development, 
  experienced and motivated              succession planning and 
  employees, this could                  the systems for developing 
  have an impact on business             talent inherited from our 
  performance.                           acquisitions are within 
                                         a programme of review and 
                                         redevelopment to ensure 
                                         that they remain relevant 
                                         and appropriate to the 
                                         Group's ongoing strategy. 
                                         Acquiring additional skill 
                                         and competencies may result 
                                         in external hires also 
                                         to build depth in the management 
                                         teams. 
-----------------------------------    -------------------------------------- 
 The continued growth and               At least once per year 
  evolution of the Group                 a thorough review on Strategy 
  requires its organisational            is carried out. One element 
  design and infrastructure              of strategy is whether 
  to be subject to review                the organisational structure 
  and successful ongoing                 is fit for purpose. Each 
  development. A failure                 year the growth drivers 
  to do so could adversely               for the business are reviewed 
  affect the Group's ability             against the current organisation 
  to meet its objectives.                to establish whether change 
                                         is required. If there is 
                                         a requirement to change, 
                                         a formal review process 
                                         such as the recently completed 
                                         Future Fit review will 
                                         ensue. 
-----------------------------------    -------------------------------------- 
 The ability of the Group               The Group's technology 
  to provide its services                and information systems 
  effectively and competitively          and infrastructure are 
  is dependent on technology             the subject of an ongoing 
  and information systems                strategic redesign to ensure 
  that are appropriately                 that they are capable of 
  integrated and that meet               meeting the Group's strategic 
  current and anticipated                intent and future requirements, 
  future business, regulatory            whilst further mitigating 
  and security requirements.             against systems failures 
                                         and the increasing threat 
                                         of external interference. 
-----------------------------------    -------------------------------------- 
 Business continuity: The               The Group is developing 
  Group is exposed to risks              and reviewing its business 
  that, should they arise,               continuity risks as part 
  may give rise to the interruption      of the risk management 
  of critical business processes         and the corporate audit 
  that could adversely impact            processes. Mitigation strategies 
  the Group or its clients.              and continuity plans are 
                                         part of a structured review 
                                         programme. 
-----------------------------------    -------------------------------------- 
 The underlying terms of                The Group has adopted processes 
  the Group's commercial                 for identifying and mitigating 
  relationships drive the                against undue risks in 
  profitability of the Group.            all prospective commercial 
  The nature of the Group's              relationships, supported 
  business means that the                by personnel with expertise 
  Group could be exposed                 and/or experience in key 
  to undue cost or liability             commercial risk areas. 
  if it agrees inappropriate 
  terms. 
-----------------------------------    -------------------------------------- 
 
   Financial risks 
-----------------------------------    -------------------------------------- 
 The Group's resources                  The financial controls 
  and finances must be managed           of the Group, as well as 
  in accordance with rigorous            their effectiveness, are 
  standards and stringent                monitored by the Board 
  controls. A failure to                 in the context of the standards 
  meet those standards or                to which the Group is subject 
  implement appropriate                  and the expectations of 
  controls may result in                 its stakeholders. This 
  the Group's resources                  monitoring is supported 
  being improperly utilised              by a dedicated internal 
  or its financial statements            audit function. The Group's 
  being inaccurate or misleading.        financial function, systems 
                                         and controls are also subject 
                                         to periodic review to ensure 
                                         that they remain robust 
                                         and fit for purpose. 
-----------------------------------    -------------------------------------- 
 The group is exposed to                The management of the financial 
  liquidity, interest rate,              risks facing the Group 
  currency and credit risks.             is governed by policies 
                                         reviewed and approved by 
                                         the Board. These policies 
                                         primarily cover liquidity 
                                         risk, interest rate risk, 
                                         currency risk and credit 
                                         risk. The primary objective 
                                         of the Group's policies 
                                         is to minimise financial 
                                         risk at a reasonable cost. 
                                         The Group does not trade 
                                         in financial instruments. 
-----------------------------------    -------------------------------------- 
 UDG Healthcare plc's reporting         The majority of the Group's 
  currency is the euro.                  activities are conducted 
  Given the nature of the                in the local currency of 
  Group's businesses, exposure           the country of operation. 
  arises in the normal course            As a consequence, the primary 
  of business to other currencies,       foreign exchange risk arises 
  principally sterling and               from the fluctuating value 
  the US dollar.                         of the Group's net investment 
                                         in different currencies 
                                         and from translating non-euro 
                                         profits into euro for reporting 
                                         purposes. 
-----------------------------------    -------------------------------------- 
 

Statement of Directors

in respect of the half-yearly financial report

Each of the directors confirms that to the best of their knowledge and belief:

-- the condensed set of interim financial statements comprising the condensed consolidated income statement, the condensed consolidated statement of comprehensive income, the condensed consolidated statement of changes in equity, the condensed consolidated balance sheet, the condensed consolidated cash flow statement, and the related notes have been prepared in accordance with IAS 34, Interim Financial Reporting as adopted by the EU;

   --      the half-yearly financial report includes a fair review of the information required by: 

(a) Regulation 8(2) of the Transparency (Directive 2004/109/EC) Regulations 2007, being an indication of important events that have occurred during the first six months of the financial year and their impact on the condensed set of financial statements; and a description of the principal risks and uncertainties for the remaining six months of the year; and

(b) Regulation 8(3) of the Transparency (Directive 2004/109/EC) Regulations 2007, being related party transactions that have taken place in the first six months of the current financial year and that have materially affected the financial position or performance of the entity during that period; and any changes in the related party transactions described in the last Annual Report that could do so.

The Group's auditor has not reviewed this condensed half-yearly financial report.

On behalf of the Board(i)

 
 P. Gray    B. McAtamney 
 Director   Director 
 

18 May 2016

(i) The Board of UDG Healthcare plc is disclosed on the Company's website, www.udghealthcare.com.

Condensed consolidated income statement

for the six months ended 31 March 2016

 
 
 
                                    Six months                               Restated (note 7) 
                                ended 31 March                         Six months ended 31 March 2015 
                                          2016 
 
                       Notes                                        Pre- 
                                         Total         exceptional items 
                                 31 March 2016               (Unaudited) 
                                   (Unaudited) 
                                       EUR'000                   EUR'000              Exceptional 
                                                                                            items              Total 
                                                                                         (note 5)      31 March 2015 
                                                                                      (Unaudited)        (Unaudited) 
                                                                                          EUR'000            EUR'000 
 
 Continuing 
 operations 
 Revenue                   3           472,414                   446,209                        -            446,209 
 Cost of sales                       (303,821)                 (290,128)                  (2,050)          (292,178) 
--------------------  ------  ----------------  ---  -------------------  -----------------------  ----------------- 
 
 Gross profit                          168,593                   156,081                  (2,050)            154,031 
 
   Selling and 
   distribution 
   expenses                          (111,737)                 (106,521)                  (4,221)          (110,742) 
 Administration 
  expenses                             (8,618)                   (7,683)                  (1,600)            (9,283) 
 Other operating 
  expenses                             (8,594)                   (7,931)                  (2,216)           (10,147) 
 Transaction costs                       (834)                     (276)                        -              (276) 
 Share of joint 
  ventures' profit 
  after tax                4             1,437                       693                        -                693 
 Profit on disposal 
  of subsidiary 
  undertakings             5                 -                         -                      268                268 
--------------------  ------  ----------------  ---  -------------------  -----------------------  ----------------- 
 
 Operating profit                       40,247                    34,363                  (9,819)             24,544 
 
 Finance income            6             5,493                    40,853                        -             40,853 
 Finance expense           6          (12,603)                  (47,792)                        -           (47,792) 
 
 Profit before tax 
  from continuing 
  operations                            33,137                    27,424                  (9,819)             17,605 
 
   Income tax 
   (expense)/credit                    (8,738)                   (6,775)                    1,304            (5,471) 
--------------------  ------  ----------------  ---  -------------------  -----------------------  ----------------- 
 
   Profit for the 
   period from 
   continuing 
   operations                           24,399                    20,649                  (8,515)             12,134 
 
   Profit after tax 
   for the period 
   from discontinued 
   operations              7             6,967                     9,798                    (730)              9,068 
--------------------  ------  ----------------  ---  -------------------  -----------------------  ----------------- 
 Profit for the 
  period                                31,366                    30,447                  (9,245)             21,202 
--------------------  ------  ----------------  ---  -------------------  -----------------------  ----------------- 
 
  Profit 
  attributable to: 
 Owners of the 
  parent                                31,366                                                                21,181 
 Non-controlling 
  interests                                  -                                                                    21 
--------------------  ------  ----------------  ---  ------------------------------  ------  ----------------------- 
                                        31,366                                                                21,202 
--------------------  ------  ----------------  ---  ------------------------------  ------  ----------------------- 
 
  Profit 
  attributable to: 
 Continuing 
  operations                            24,399                                                                12,134 
 Discontinued 
  operations                             6,967                                                                 9,068 
--------------------  ------  ----------------  ---  ------------------------------  ------  ----------------------- 
                                        31,366                                                                21,202 
--------------------  ------  ----------------  ---  ------------------------------  ------  ----------------------- 
 
  Earnings per 
  ordinary share: 
 Basic - continuing 
  operations               8             9.92c                                                                 4.98c 
 Basic - 
  discontinued 
  operations               8             2.83c                                                                 3.72c 
--------------------  ------  ----------------  ---  ------------------------------  ------  ----------------------- 
 Basic                                  12.75c                                                                 8.70c 
--------------------  ------  ----------------  ---  ------------------------------  ------  ----------------------- 
 
   Diluted - 
   continuing 
   operations              8             9.86c                                                                 4.95c 
 Diluted - 
  discontinued 
  operations               8             2.82c                                                                 3.70c 
--------------------  ------  ----------------  ---  ------------------------------  ------  ----------------------- 
 Diluted                                12.68c                                                                 8.65c 
--------------------  ------  ----------------  ---  ------------------------------  ------  ----------------------- 
 
 

Condensed consolidated statement of

comprehensive income

for the six months ended 31 March 2016

 
 
                                                                                             Restated 
                                                                                                (note 
                                                                Six months                         7) 
                                                                     ended                        Six 
                                                                  31 March                     months 
                                                                      2016                      ended 
                                                                                             31 March 
                                                                                                 2015 
                                                               (Unaudited)                (Unaudited) 
                                            Notes                  EUR'000                    EUR'000 
 
 Profit for the period                                              31,366                     21,202 
 
 Other comprehensive income/(expense): 
  Items that will not be reclassified 
  to profit or loss: 
 Remeasurement (loss)/gain 
  on Group defined benefit schemes             14 
 
        *    Continuing operations                                 (4,900)                   (14,156) 
 
        *    Discontinued operations                                   469                      (618) 
 Deferred tax on Group defined 
  benefit schemes 
 
        *    Continuing operations                                     527                      1,611 
 
        *    Discontinued operations                                  (94)                        124 
---------------------------------------  --------  --------  -------------  -----------  ------------ 
                                                                   (3,998)                   (13,039) 
---------------------------------------  --------  --------  -------------  -----------  ------------ 
 Items that may be reclassified 
  subsequently to profit or 
  loss: 
 Foreign currency translation 
  adjustment                                   11 
 
        *    Continuing operations                                (26,663)                     66,310 
 
        *    Discontinued operations                               (4,640)                      4,205 
 Reclassification on loss of 
  control of subsidiary undertakings           11                        -                      (165) 
 Gain/(loss) on hedge of net 
  investment in foreign operations             11                    2,262                   (21,722) 
 Group cash flow hedges: 
 - Effective portion of cash 
  flow hedges - movement into 
  reserve                                             3,424                      37,517 
 - Effective portion of cash 
  flow hedges - movement out 
  of reserve                                        (7,273)                   (32,891) 
                                                   --------                 ----------- 
 Effective portion of cash 
  flow hedges                                  11                  (3,849)                      4,626 
 - Movement in deferred tax 
  - movement into reserve                             (428)                     (4,689) 
 - Movement in deferred tax 
  - movement out of reserve                             909                       4,111 
                                                   --------                 ----------- 
 Net movement in deferred tax                  11                      481                      (578) 
---------------------------------------  --------  --------  -------------  -----------  ------------ 
                                                                  (32,409)                     52,676 
---------------------------------------  --------  --------  -------------  -----------  ------------ 
 
 Other comprehensive (expense)/income, 
  net of tax                                                      (36,407)                     39,637 
---------------------------------------  --------  --------  -------------  -----------  ------------ 
 
 Total comprehensive (expense)/income, 
  net of tax                                                       (5,041)                     60,839 
---------------------------------------  --------  --------  -------------  -----------  ------------ 
 
 Total comprehensive (expense)/income 
  attributable to: 
 Owners of the parent                                              (5,041)                     60,818 
 Non-controlling interests                                               -                         21 
---------------------------------------  --------  --------  -------------  -----------  ------------ 
                                                                   (5,041)                     60,839 
---------------------------------------  --------  --------  -------------  -----------  ------------ 
 
 
 Total comprehensive (expense)/income 
  attributable to: 
 Continuing operations                     (7,743)   48,060 
 Discontinued operations                     2,702   12,779 
----------------------------------------  --------  ------- 
                                           (5,041)   60,839 
  --------------------------------------  --------  ------- 
 

Condensed consolidated statement of changes in

equity

for the six months ended 31 March 2016

 
 
                                                            Equity                            Other 
                                                             share     Share   Retained    reserves      Total 
                                                           capital   premium   earnings   (Note 11)     equity 
                                                           EUR'000   EUR'000    EUR'000     EUR'000    EUR'000 
 
 At 1 October 2015                                          12,621   152,164    433,912     10,077     608,774 
 
 Profit for the financial period                                 -         -     31,366           -     31,366 
 Other comprehensive income/(expense): 
 Effective portion of cash flow hedges                           -         -          -     (3,849)    (3,849) 
 Deferred tax on cash flow hedges                                -         -          -         481        481 
 Translation adjustment 
 
        *    Continuing operations                               -         -          -    (26,663)   (26,663) 
 
        *    Discontinued operations                             -         -          -     (4,640)    (4,640) 
 Gain on hedge of net investment in foreign operations           -         -          -       2,262      2,262 
 Remeasurement (loss)/gain on defined benefit schemes 
 
        *    Continuing operations                               -         -    (4,900)           -    (4,900) 
 
        *    Discontinued operations                             -         -        469           -        469 
 Deferred tax on defined benefit schemes 
 
        *    Continuing operations                               -         -        527           -        527 
 
        *    Discontinued operations                             -         -       (94)           -       (94) 
-------------------------------------------------------  ---------  --------  ---------  ----------  --------- 
 Total comprehensive income/(expense) for the period             -         -     27,368    (32,409)    (5,041) 
 Transactions with shareholders: 
 New shares issued                                              71     3,098          -           -      3,169 
 Share-based payment expense                                     -         -          -         824        824 
 Dividends paid to equity holders                                -         -   (19,867)           -   (19,867) 
 Release from share-based payment reserve                        -         -      1,904     (1,904)          - 
-------------------------------------------------------  ---------  --------  ---------  ----------  --------- 
 
 At 31 March 2016 - unaudited                               12,692   155,262    443,317    (23,412)    587,859 
-------------------------------------------------------  ---------  --------  ---------  ----------  --------- 
 

for the six months ended 31 March 2015 (restated)

 
 
                                        Equity                            Other    Attributable 
                                         share     Share   Retained    reserves       to owners   Non-controlling         Total 
                                       capital   premium   earnings   (Note 11)   of the parent         interests        equity 
                                       EUR'000   EUR'000    EUR'000     EUR'000         EUR'000           EUR'000       EUR'000 
 
 At 1 October 2014                      12,485   147,176    404,212    (30,173)         533,700              (21)       533,679 
 
 Profit for the financial period             -         -     21,181           -          21,181                21        21,202 
 Other comprehensive 
 income/(expense): 
 Effective portion of cash flow 
  hedges                                     -         -          -       4,626           4,626                 -         4,626 
 Deferred tax on cash flow hedges            -         -          -       (578)           (578)                 -         (578) 
 Translation adjustment 
 
        *    Continuing operations           -         -          -      66,310          66,310                 -        66,310 
 
        *    Discontinued operations         -         -          -       4,205           4,205                 -         4,205 
 Reclassification on loss of control 
  of subsidiary undertakings                 -         -          -       (165)           (165)                 -         (165) 
 Loss on hedge of net investment in 
  foreign operations                         -         -          -    (21,722)        (21,722)                 -      (21,722) 
 Remeasurement loss on defined 
 benefit schemes 
 
        *    Continuing operations           -         -   (14,156)           -        (14,156)                 -      (14,156) 
 
        *    Discontinued operations         -         -      (618)           -           (618)                 -         (618) 
 Deferred tax on defined benefit 
 schemes 
 
        *    Continuing operations           -         -      1,611           -           1,611                 -         1,611 
 
        *    Discontinued operations         -         -        124           -             124                 -           124 
------------------------------------  --------  --------  ---------  ----------  --------------  ----------------  ------------ 
 Total comprehensive income for the 
  period                                     -         -      8,142      52,676          60,818                21        60,839 
 Transactions with shareholders: 
 New shares issued                         117     4,512          -           -           4,629                 -         4,629 
 Share-based payment expense                 -         -          -         965             965                 -           965 
 Dividends paid to equity holders            -         -   (18,061)           -        (18,061)                 -      (18,061) 
 Release from share-based payment 
  reserve                                    -         -      2,134     (2,134)               -                 -             - 
------------------------------------  --------  --------  ---------  ----------  --------------  ----------------  ------------ 
 
 At 31 March 2015 - unaudited           12,602   151,688    396,427      21,334         582,051                 -       582,051 
------------------------------------  --------  --------  ---------  ----------  --------------  ----------------  ------------ 
 

Condensed consolidated balance sheet

as at 31 March 2016

 
 
                                                         As at 31 March     As at 31 March     As at 30 September 2015 
                                                                   2016               2015 
                                                            (Unaudited)        (Unaudited)                   (Audited) 
                                               Notes            EUR'000            EUR'000                     EUR'000 
 
 ASSETS 
 Non-current 
 Property, plant and equipment                     9            121,702            193,902                     117,903 
 Goodwill                                         10            345,962            381,384                     358,213 
 Intangible assets                                10             90,296            147,134                     101,693 
 Investment in joint ventures and associates      10             23,734             21,752                      23,079 
 Derivative financial instruments                 12             13,386             29,601                      22,048 
 Deferred income tax assets                                       4,101             10,374                       3,984 
 Employee benefits                                14             12,459             15,882                      13,067 
--------------------------------------------  ------  -----------------  -----------------  -------------------------- 
 
 Total non-current assets                                       611,640            800,029                     639,987 
--------------------------------------------  ------  -----------------  -----------------  -------------------------- 
 
 Current 
 Inventories                                                     55,981            169,048                      55,017 
 Trade and other receivables                                    197,845            431,943                     205,248 
 Cash and cash equivalents                        12            182,949            145,461                     214,078 
 Current income tax assets                                          117              4,822                       1,612 
 Derivative financial instruments                 12              4,520              4,799                       4,750 
 Assets held for sale                              7            474,684                  -                     473,820 
 
 Total current assets                                           916,096            756,073                     954,525 
--------------------------------------------  ------  -----------------  -----------------  -------------------------- 
 
 Total assets                                                 1,527,736          1,556,102                   1,594,512 
--------------------------------------------  ------  -----------------  -----------------  -------------------------- 
 
 EQUITY 
 Equity share capital                                            12,692             12,602                      12,621 
 Share premium                                                  155,262            151,688                     152,164 
 Other reserves                                   11           (23,412)             21,334                      10,077 
 Retained earnings                                              443,317            396,427                     433,912 
--------------------------------------------  ------  -----------------  -----------------  -------------------------- 
 
 Total equity                                                   587,859            582,051                     608,774 
 
 LIABILITIES 
 Non-current 
 Interest-bearing loans and borrowings            12            409,577            453,925                     415,840 
 Provisions                                       13              7,167             15,593                       7,508 
 Employee benefits                                14             13,921             34,896                      18,303 
 Deferred income tax liabilities                                 27,305             33,613                      28,050 
--------------------------------------------  ------  -----------------  -----------------  -------------------------- 
 
 Total non-current liabilities                                  457,970            538,027                     469,701 
--------------------------------------------  ------  -----------------  -----------------  -------------------------- 
 
 Current 
 Interest-bearing loans and borrowings            12             19,293                837                      20,811 
 Trade and other payables                                       183,694            420,601                     191,758 
 Current income tax liabilities                                   7,403              4,851                       4,452 
 Provisions                                       13             11,406              9,735                      18,683 
 Liabilities held for sale                         7            260,111                  -                     280,333 
--------------------------------------------  ------  -----------------  -----------------  -------------------------- 
 
 Total current liabilities                                      481,907            436,024                     516,037 
--------------------------------------------  ------  -----------------  -----------------  -------------------------- 
 
 Total liabilities                                              939,877            974,051                     985,738 
--------------------------------------------  ------  -----------------  -----------------  -------------------------- 
 
 Total equity and liabilities                                 1,527,736          1,556,102                   1,594,512 
--------------------------------------------  ------  -----------------  -----------------  -------------------------- 
 
 
 
 

Condensed consolidated cash flow statement

for the six months ended 31 March 2016

 
                                                                                           Restated (note 7) 
                                        Six months ended 31 March 2016               Six months ended 31 March 2015 
                                                  (Unaudited)                                  (Unaudited) 
                                   ---------------------------------------       ------------------------------------- 
                                    Continuing   Discontinued                     Continuing   Discontinued 
                                    operations     operations        Total        operations     operations      Total 
                                       EUR'000        EUR'000      EUR'000           EUR'000        EUR'000    EUR'000 
 Cash flows from 
 operating activities 
 Profit before tax                      33,137          8,546       41,683            17,605         10,426     28,031 
 Finance income                        (5,493)            (7)      (5,500)          (40,853)            (5)   (40,858) 
 Finance expense                        12,603             58       12,661            47,792             60     47,852 
 Exceptional items                           -              -            -             9,819            844     10,663 
---------------------------------  -----------  -------------  -----------  ---  -----------  -------------  --------- 
 Operating profit 
  (pre-exceptional items)               40,247          8,597       48,844            34,363         11,325     45,688 
 Share of joint ventures' profit 
  after tax                            (1,437)              -      (1,437)             (693)              -      (693) 
 Depreciation charge                     8,785              -        8,785             8,143          3,575     11,718 
 Loss/(profit) on disposal of 
  property, plant and equipment              2           (11)          (9)                 3           (18)       (15) 
 Impairment of intangible assets             -          1,031        1,031                 -              -          - 
 Amortisation of intangible 
  assets                                 8,594              -        8,594             8,307            900      9,207 
 Share-based payment expense               824              -          824               965              -        965 
 (Increase)/decrease in 
  inventories                          (2,838)          3,523          685           (1,936)          5,161      3,225 
 Decrease/(increase) in trade and 
  other receivables                      2,072        (9,170)      (7,098)           (4,952)       (10,888)   (15,840) 
 Decrease in trade payables, 
  provisions and other payables        (8,940)       (20,413)     (29,353)             (215)        (7,414)    (7,629) 
 Exceptional items paid                (2,076)              -      (2,076)           (4,633)          (946)    (5,579) 
 Increase in transaction costs 
  accrued                                  672          6,819        7,491                 -              -          - 
 Interest paid                         (5,969)              -      (5,969)           (6,226)              -    (6,226) 
 Income taxes paid                     (3,299)          (707)      (4,006)           (5,438)        (1,720)    (7,158) 
---------------------------------  -----------  -------------  -----------  ---  -----------  -------------  --------- 
 Net cash inflow/(outflow) from 
  operating activities                  36,637       (10,331)       26,306            27,688           (25)     27,663 
---------------------------------  -----------  -------------  -----------  ---  -----------  -------------  --------- 
 
 Cash flows from 
 investing activities 
 Interest received                         220              7          227               197              5        202 
 Purchase of property, plant and 
  equipment                           (17,027)        (2,306)     (19,333)          (16,890)        (3,805)   (20,695) 
 Proceeds from disposal of 
  property, plant and equipment            267             11          278                46            153        199 
 Investment in intangible assets 
  - computer software                  (1,984)        (6,051)      (8,035)             (684)       (10,117)   (10,801) 
 Deferred contingent acquisition 
  consideration paid                   (5,281)              -      (5,281)             (210)              -      (210) 
 Disposal of subsidiary 
  undertakings (net of cash and 
  cash equivalents disposed)                 -              -            -               343              -        343 
 Investment in joint ventures                -              -            -           (6,124)              -    (6,124) 
---------------------------------  -----------  -------------  -----------  ---  -----------  -------------  --------- 
 Net cash outflow from investing 
  activities                          (23,805)        (8,339)     (32,144)          (23,322)       (13,764)   (37,086) 
---------------------------------  -----------  -------------  -----------  ---  -----------  -------------  --------- 
 
 Cash flows from 
 financing activities 
 Proceeds from issue of shares 
  (including share premium 
  thereon)                               3,169              -        3,169             4,629              -      4,629 
 Proceeds from interest-bearing 
  loans and borrowings                       -              -            -            11,558              -     11,558 
 Repayments of interest-bearing 
  loans and borrowings                   (649)              -        (649)          (12,673)              -   (12,673) 
 Group transfers                        10,567       (10,567)            -            14,573       (14,573)          - 
 (Decrease)/increase in finance 
  leases                                  (23)              -         (23)                 2              -          2 
 Dividends paid to equity holders 
  of the Company                      (19,867)              -     (19,867)          (18,061)              -   (18,061) 
---------------------------------  -----------  -------------  -----------  ---  -----------  -------------  --------- 
 Net cash (outflow)/inflow from 
  financing activities                 (6,803)       (10,567)     (17,370)                28       (14,573)   (14,545) 
---------------------------------  -----------  -------------  -----------  ---  -----------  -------------  --------- 
 Net increase/(decrease) in cash 
  and cash equivalents                   6,029       (29,237)     (23,208)             4,394       (28,362)   (23,968) 
 Translation adjustment                                            (7,921)                                      12,174 
 Cash and cash equivalents at 
  beginning of period                                              214,078                                     157,255 
---------------------------------  -----------  -------------  -----------  ---  -----------  -------------  --------- 
 Cash and cash equivalents at end 
  of period                                                        182,949                                     145,461 
---------------------------------  -----------  -------------  -----------  ---  -----------  -------------  --------- 
 Cash and cash 
 equivalents is 
 comprised of: 
 Cash at bank and short term 
  deposits                                                         182,949                                     145,461 
 
 

Notes to the condensed interim financial statements

for the six months ended 31 March 2016

1. Reporting entity

UDG Healthcare plc (the "Company") is a company domiciled in Ireland. The unaudited condensed consolidated interim financial information of the Company for the six months ended 31 March 2016, are comprised of the Company and its subsidiaries (together referred to as the "Group") and the Group's interest in joint ventures and associates.

The financial information presented herein does not amount to statutory financial statements that are required by Section 347 of the Companies Act, 2014 to be annexed to the annual return of the Company. The financial information does not include all the information and disclosures required in the annual financial statements. The statutory financial statements for the year ended 30 September 2015 will be annexed to the annual return and filed with the Registrar of Companies. The audit report on those statutory financial statements was unqualified and did not contain any matters to which attention was drawn by way of emphasis.

2. Statement of compliance

These unaudited condensed consolidated interim financial statements ("the interim accounts") for the six months ended 31 March 2016 have been prepared in accordance with IAS 34, Interim Financial Reporting, as endorsed by the European Union. These interim accounts do not include all of the information required for full annual financial statements and should be read in conjunction with the most recent published consolidated financial statements of the Group. The accounting policies applied in the interim accounts are the same as those applied in the 2015 Annual Report.

The Group has adopted the following standards and interpretations during the period but these did not have a material effect on the results or the financial position of the Group:

 
 
      *    Annual Improvements to IFRSs 2011-2013 Cycle 
 
 
      *    Annual improvements to IFRSs 2010-2012 Cycle 
 
 
      *    Amendments to IAS 19 Defined Benefit Plans: Employee 
           Contributions 
 

The following standards, amendments to existing standards, and interpretations published by IASB are not yet effective for the period ended 31 March 2016 and have not been early adopted in preparing the financial statements:

 
 
     *    Amendments to IFRS 11: Accounting for acquisitions of 
          interests in Joint Operations 
 
 
     *    Amendments to IAS 16 and IAS 38: Clarification of 
          acceptable methods of depreciation and amortisation 
 
 
     *    Amendments to IAS 16: Property, Plant and Equipment 
          and IAS 41: Bearer Plants 
 
 
     *    Amendments to IAS 27: Equity method in Separate 
          Financial Statements 
 
 
     *    Amendments to IAS 1: Disclosure Initiative 
 
 
     *    Annual Improvements to IFRSs 2012-2014 Cycle 
 
 
     *    Amendments to IFRS 10, IFRS 12 and IAS 28: Investment 
          Entities: Applying the consolidation exception* 
 
 
     *    IFRS 14: Regulatory Deferral Accounts* 
 
     *    Amendments to IAS 7: Disclosure Initiative* 
 
 
     *    Amendments to IAS 12: Recognition of deferred tax 
          assets for unrealised losses* 
 
 
     *    IFRS 15: Revenue from contracts with customers* 
 
 
     *    IFRS 9: Financial Instruments* 
 
 
     *    IFRS 16: Leases* 
 
 
     *    Amendments to IFRS 10 and IAS 28: Sale or 
          contribution of assets between an investor and its 
          associate or joint venture* 
 

A number of the standards (*) set out above have not yet been endorsed by the EU. These standards, interpretations and amendments to existing standards will be applied for the purposes of the Group and Company financial statements with effect from their respective effective dates. The Group is currently considering the impact of these accounting standards.

The preparation of interim financial statements requires the use of certain critical accounting estimates, judgements and assumptions. The areas involving a high degree of judgement or complexity, or areas where assumptions and estimates are significant to the financial statements, relate primarily to goodwill impairment testing, revenue recognition, valuation and ownership of inventory, recoverability of trade receivables and valuation of provisions. The nature of the assumptions and estimates made in the preparation of the interim accounts are the same as those identified in our most recent annual report. The estimates and associated assumptions are based on historical experience and various other factors that are believed to be reasonable under the circumstances, the results of which form the basis of making the judgements about carrying values of assets and liabilities that are not readily apparent from other sources. There was no significant change to any of these key estimates or judgements in the six month period, other than a change to certain actuarial assumptions as set out in note 14.

The income tax expense for the six month period is calculated by applying the directors' best estimate of the annual effective tax rate to the profit for the period.

The directors have a reasonable expectation that the Company, and the Group as a whole, have adequate resources to continue in operational existence for the foreseeable future. For this reason, they continue to adopt the going concern basis in preparing the condensed consolidated interim financial statements.

As permitted by the Transparency (Directive 2004/109/EC) Regulations 2007 this Interim Report is available on www.udghealthcare.com. However, if a physical copy is required, please contact the Company Secretary.

3. Segmental analysis

The Group's operations are divided into the following operating segments:

Ashfield Commercial & Medical Services - The Ashfield Commercial and Medical Services segment provides sales and marketing services ('CSO'), healthcare communications, event management and medical affairs & regulatory services to healthcare companies.

Sharp Packaging Services - The Sharp Packaging Services segment provides outsourced commercial and clinical trial packaging services to healthcare companies.

Supply Chain Services - The Supply Chain Services segment combines all of the Group's healthcare logistics based companies.

On 18 September 2015 the Group announced the proposed disposal of United Drug Supply Chain Services, United Drug Sangers, TCP Group and MASTA. This has resulted in a change in the composition of the operating segments during the year ended 30 September 2015. Following this change, we have revised our segmental reporting and restated the prior year segmental disclosures as required by IFRS 8. Details of the discontinued operations are included in note 7. The segmental analysis of the business corresponds with the Group's organisational structure and the Group's internal reporting for the purpose of managing the business and assessing performance as reviewed by the Group's Chief Operating Decision Maker (CODM), which the Group has defined as Brendan McAtamney (Chief Executive Officer).

The amount of revenue and operating profit under the Group's operating segments is as follows:

 
 
                                                                                             Six months     Six months 
                                                                                                  ended          ended 
 Continuing operations                                                                         31 March       31 March 
                                                                                                   2016           2015 
                                                                                                EUR'000        EUR'000 
 Revenue 
 Ashfield Commercial & Medical Services                                                         291,189        283,602 
 Sharp Packaging Services                                                                       132,388        110,438 
 Supply Chain Services                                                                           48,837         52,169 
                                                                                                472,414        446,209 
----------------------------------------------------------------------------------------  -------------  ------------- 
 Operating profit before acquired intangible amortisation, transaction costs and 
 exceptional 
 items 
 Ashfield Commercial & Medical Services                                                          28,012         26,181 
 Sharp Packaging Services                                                                        16,187         11,760 
 Supply Chain Services                                                                            4,191          4,052 
                                                                                                 48,390         41,993 
 Amortisation of acquired intangibles                                                           (7,309)        (7,354) 
 Exceptional items                                                                                    -        (9,819) 
 Transaction costs                                                                                (834)          (276) 
----------------------------------------------------------------------------------------  -------------  ------------- 
 Operating profit                                                                                40,247         24,544 
 Finance income                                                                                   5,493         40,853 
 Finance expense                                                                               (12,603)       (47,792) 
----------------------------------------------------------------------------------------  -------------  ------------- 
 
   Profit before tax                                                                             33,137         17,605 
 Income tax expense                                                                             (8,738)        (5,471) 
----------------------------------------------------------------------------------------  -------------  ------------- 
 
   Profit after tax for the period                                                               24,399         12,134 
----------------------------------------------------------------------------------------  -------------  ------------- 
 
 Geographical analysis of revenue 
 United Kingdom and Republic of Ireland                                                         188,782        190,475 
 North America                                                                                  202,667        175,401 
 Continental Europe                                                                              80,965         80,333 
----------------------------------------------------------------------------------------  -------------  ------------- 
                                                                                                472,414        446,209 
----------------------------------------------------------------------------------------  -------------  ------------- 
 
 

4. Share of joint ventures' profit after tax

 
                                              Six months   Six months 
                                                   ended        ended 
                                                31 March     31 March 
                                                    2016         2015 
                                                 EUR'000      EUR'000 
 Group share of revenue                           32,416       28,303 
 Group share of expenses, inclusive of tax      (30,979)     (27,610) 
-------------------------------------------  -----------  ----------- 
 
 Group share of profit after tax                   1,437          693 
-------------------------------------------  -----------  ----------- 
 

5. Exceptional items

 
 
                                                            Six months     Six months 
                                                                 ended          ended 
                                                              31 March       31 March 
                                                                  2016           2015 
                                                               EUR'000        EUR'000 
 Restructuring costs and other                                       -          4,618 
 Impairment of assets                                                -          4,266 
 Onerous leases                                                      -          1,203 
 Profit on disposal of subsidiary undertakings                       -          (268) 
 Exceptional items relating to continuing operations                 -          9,819 
 Exceptional items relating to discontinued operations               -            844 
-------------------------------------------------------  -------------  ------------- 
                                                                     -         10,663 
 Exceptional tax credit                                              -        (1,418) 
-------------------------------------------------------  -------------  ------------- 
 Net exceptional items after taxation                                -          9,245 
-------------------------------------------------------  -------------  ------------- 
 

Restructuring costs and other, included in the six months to 31 March 2015, primarily included redundancy costs of EUR4,499,000 in relation to recently acquired and existing Group businesses. The closure of Aquilant Scientific (UK) Limited (a UK based distributor of laboratory equipment) was announced on 28 February 2015. This resulted in non-cash impairment charges in respect of goodwill (EUR2,216,000) and other assets (EUR2,050,000). Onerous lease costs were incurred in relation to the recently acquired and existing portfolio of leased properties that are no longer in use. Discontinued operations incurred redundancy costs of EUR844,000 during the prior period.

During the prior period, the Group disposed of its shareholding in Ashfield KK as part of the Group entering into a joint venture agreement with CMIC Holdings Co., Ltd. The Group also disposed of its shareholding in Pharmaceutical Trade Services, Inc. The disposals resulted in a net profit of EUR268,000.

Reconciliation to Group Income Statement - six months ended 31 March 2015

 
 
                                                                              Other     Disposal of            Total 
                    Cost of sales    Distribution    Administration       operating      subsidiary      exceptional 
                                         expenses          expenses        expenses    undertakings            items 
                          EUR'000         EUR'000           EUR'000         EUR'000         EUR'000          EUR'000 
 
 Restructuring 
  costs and 
  other                         -           4,162               456               -               -            4,618 
 Impairment of 
  assets                    2,050               -                 -           2,216               -            4,266 
 Onerous leases                 -              59             1,144               -               -            1,203 
 Loss on 
  disposal of 
  subsidiary 
  undertakings                  -               -                 -               -           (268)            (268) 
----------------  ---------------  --------------  ----------------  --------------  --------------  --------------- 
                            2,050           4,221             1,600           2,216           (268)            9,819 
 Discontinued 
  operations                    -             844                 -               -               -              844 
----------------  ---------------  --------------  ----------------  --------------  --------------  --------------- 
                            2,050           5,065             1,600           2,216           (268)           10,663 
 ---------------  ---------------  --------------  ----------------  --------------  --------------  --------------- 
 

6. Finance income and expense

 
                                                                                     Six months   Six months 
                                                                                          ended        ended 
                                                                                       31 March     31 March 
                                                                                           2016         2015 
                                                                                        EUR'000      EUR'000 
 Finance income 
 Income arising from cash deposits                                                          264          197 
 Fair value of cash flow hedges transferred from equity                                       -       32,891 
 Fair value adjustments to fair value hedges                                                  -        7,702 
 Fair value adjustment to guaranteed senior unsecured notes                               1,654            - 
 Foreign currency gain on retranslation of guaranteed senior unsecured loan notes         3,424            - 
 Ineffective portion of cash flow hedges                                                     93           63 
 Net finance income on pension scheme obligations                                            58            - 
----------------------------------------------------------------------------------  -----------  ----------- 
                                                                                          5,493       40,853 
----------------------------------------------------------------------------------  -----------  ----------- 
 Finance expense 
 Interest on bank loans and other loans 
 -wholly repayable within 5 years                                                       (4,853)      (3,165) 
 -wholly repayable after 5 years                                                        (2,289)      (3,491) 
 Interest on finance leases                                                                 (1)          (2) 
 Interest on overdrafts                                                                    (13)        (106) 
 Unwinding of discount on provisions                                                      (369)        (409) 
 Fair value adjustments to fair value hedges                                            (1,654)            - 
 Fair value of cash flow hedges transferred from equity                                 (3,424)            - 
 Fair value adjustments to guaranteed senior unsecured loan notes                             -      (7,702) 
 Foreign currency loss on retranslation of guaranteed senior unsecured loan notes             -     (32,891) 
 Net finance cost on pension scheme obligations                                               -         (26) 
----------------------------------------------------------------------------------  -----------  ----------- 
                                                                                       (12,603)     (47,792) 
----------------------------------------------------------------------------------  -----------  ----------- 
 
   Net finance expense relating to continuing operations                                (7,110)      (6,939) 
 Net finance expense relating to discontinued operations                                   (51)         (55) 
----------------------------------------------------------------------------------  -----------  ----------- 
 
   Net finance expense                                                                  (7,161)      (6,994) 
----------------------------------------------------------------------------------  -----------  ----------- 
 

7. Net result from discontinued operations and assets and liabilities classified as held for sale

On 18 September 2015 the Group announced the proposed disposal of United Drug Supply Chain Services, United Drug Sangers, TCP Group and MASTA for an aggregate cash consideration of EUR407.5 million before adjustments in respect of working capital, taxation and costs. The disposal was approved by shareholders at an EGM on 13 October 2015 and on 1 April 2016 the Group completed the disposal of these businesses. The Group has treated these operations as discontinued operations and assets held for sale in accordance with IFRS 5. The comparative Group Income Statement, Group Statement of Comprehensive Income and Group Cash Flow to 31 March 2015 have been restated to show the discontinued operations separately from continuing operations.

The following table details the results of discontinued operations included in the Group Income Statement:

 
                                              31 March   31 March 
                                                  2016       2015 
                                               EUR'000    EUR'000 
Revenue                                        682,875    685,231 
Cost of sales                                (632,961)  (636,448) 
-------------------------------------------  ---------  --------- 
Gross profit                                    49,914     48,783 
Selling and distribution expenses             (33,921)   (33,788) 
Administration expenses                        (2,266)    (2,770) 
Other operating expenses                             -      (900) 
Settlement gain on defined benefit pension       2,404          - 
Transaction costs                              (7,534)          - 
-------------------------------------------  ---------  --------- 
Operating profit                                 8,597     11,325 
Net finance expense                               (51)       (55) 
-------------------------------------------  ---------  --------- 
Profit before exceptional items and 
 tax                                             8,546     11,270 
Exceptional items                                    -      (844) 
-------------------------------------------  ---------  --------- 
Profit from discontinued operations 
 before tax                                      8,546     10,426 
Income tax expense                             (1,579)    (1,358) 
-------------------------------------------  ---------  --------- 
Profit from discontinued operations 
 after tax                                       6,967      9,068 
-------------------------------------------  ---------  --------- 
 

In accordance with IFRS 5, depreciation of property, plant and equipment and amortisation of intangibles has not been charged on the assets held for sale. If the assets had continued to be depreciated and amortised, the respective pre-tax charges for the current period would have been EUR3,526,000 and EUR720,000.

The profit for the year from discontinued operations is fully attributable to the equity holders of the company.

The following table details the assets and liabilities classified as held for sale in the Group Balance Sheet:

 
                                       Carrying        Carrying 
                                          value           value 
                                       31 March    30 September 
                                           2016            2015 
                                        EUR'000         EUR'000 
Assets 
Property, plant and equipment            85,023          84,867 
Goodwill                                 14,296          15,629 
Intangible assets                        46,894          40,426 
Deferred income tax assets                  429             527 
Inventories                             112,377         117,155 
Trade and other receivables             215,665         215,021 
Current income tax asset                      -             195 
 
Assets held for sale                    474,684         473,820 
-----------------------------------  ----------  -------------- 
 
  Liabilities 
Deferred income tax liabilities           (381)           (387) 
Trade and other payables              (256,869)       (276,682) 
Employee benefits                       (2,527)         (3,264) 
Current income tax liabilities            (334)               - 
--------------------------------     ----------  -------------- 
 
Liabilities held for sale             (260,111)       (280,333) 
----------------------------------   ----------  -------------- 
 
Net assets                              214,573         193,487 
-----------------------------------  ----------  -------------- 
 

8. Earnings per ordinary share

 
                           Continuing       Discontinued                      Continuing       Discontinued 
                           operations         operations       Total          operations         operations      Total 
                                 2016               2016        2016                2015               2015       2015 
                              EUR'000            EUR'000     EUR'000             EUR'000            EUR'000    EUR'000 
 Profit 
  attributable to 
  the owners of 
  the parent                   24,399              6,967      31,366              12,113              9,068     21,181 
 
   Adjustment for 
   amortisation of 
   acquired 
   intangible 
   assets (net of 
   tax)                         6,347                  -       6,347               6,366                206      6,572 
 
   Adjustment for 
   transaction 
   costs (net of 
   tax)                           834              7,534       8,368                 276                  -        276 
 
   Adjustment for 
   exceptional 
   items (net of 
   tax)                             -                  -           -               8,515                730      9,245 
 
 Adjustment for 
  amortisation and 
  depreciation on 
  assets 
  classified as 
  held for sale 
  (net of 
  tax)                              -            (3,456)     (3,456)                   -                  -          - 
 
   Adjusted profit 
   attributable to 
   owners of the 
   parent                   31,580(1)          11,045(2)      42,625              27,270             10,004     37,274 
------------------  -----------------  -----------------  ----------  ------------------  -----------------  --------- 
 
 
                                                                      2016          2015 
                                                                    Number        Number 
                                                                 of shares     of shares 
 Weighted average number of shares                             246,079,718   243,529,382 
 Number of dilutive shares under option                          1,299,770     1,286,719 
------------------------------------------------------------  ------------  ------------ 
 
 Weighted average number of shares, including share options    247,379,488   244,816,101 
------------------------------------------------------------  ------------  ------------ 
 
 
                                           Continuing   Discontinued             Continuing   Discontinued 
                                           operations     operations     Total   operations     operations     Total 
                                                 2016           2016      2016         2015           2015      2015 
 Basic earnings per share - cent                 9.92           2.83     12.75         4.98           3.72      8.70 
 Diluted earnings per share - cent               9.86           2.82     12.68         4.95           3.70      8.65 
 Adjusted basic earnings per share - 
  cent                                       12.83(1)        4.49(2)     17.32        11.20           4.11     15.31 
 Adjusted diluted earnings per share - 
  cent                                       12.77(1)        4.46(2)     17.23        11.14           4.09     15.23 
 

Non-GAAP information

The Group reports certain financial measures that are not required under International Financial Reporting Standards (IFRS) which represent the generally accepted accounting principles (GAAP) under which the Group reports. The Group believes that the presentation of these non-GAAP measures provides useful supplemental information which, when viewed in conjunction with our IFRS financial information, provides investors with a more meaningful understanding of the underlying financial and operating performance of the Group and its divisions. These measures are also used internally to evaluate the historical and planned future performance of the Group's operations and to measure executive management's performance based remuneration.

(1) Adjusted profit attributable to owners of the parent from continuing operations is stated before the amortisation of acquired intangible assets and transaction costs.

(2) Adjusted profit attributable to owners of the parent from discontinued operations is stated after charging depreciation and amortisation of assets classified as held for sale (EUR3.5m, net of tax) and adding back transaction costs (EUR7.5m, net of tax). Adjusted profit attributable to owners of the parent in the comparative period reflected a depreciation and amortisation charge of EUR3.6m, net of tax, relating to assets forming part of the discontinued operations. Under IFRS, depreciation and amortisation are not charged on assets classified as held for sale, therefore, no equivalent depreciation and amortisation has been charged on these assets in the current period's results. To provide comparable information on the performance of the discontinued operations, an estimated charge of EUR3.5m (net of tax) for depreciation and amortisation in the current period has been reflected in the adjustments above.

Treasury shares have been excluded from the weighted average number of shares in issue used in the calculation of earnings per share.

The average market value of the Company's shares for the purposes of calculating the dilutive effect of share options was based on quoted market prices for the year.

9. Property, plant and equipment

 
                             Land and         Plant and                           Computer      Assets under 
                            buildings         equipment   Motor vehicles         equipment      construction     Total 
                              EUR'000           EUR'000          EUR'000           EUR'000           EUR'000   EUR'000 
 Cost 
 At 1 October 2015             72,817            86,990              995            20,456            10,017   191,275 
 Additions in 
  period                          461             7,955              126             2,704             5,781    17,027 
 Disposals in 
  period                         (16)           (2,961)             (64)             (298)                 -   (3,339) 
 Transfer to assets 
  held for sale                     -           (1,163)                -                 -                 -   (1,163) 
 Reclassifications                  -                 8             (79)                71                 -         - 
 Translation 
  adjustment                  (2,145)           (1,949)             (94)           (1,141)             (363)   (5,692) 
-------------------  ----------------  ----------------  ---------------  ----------------  ----------------  -------- 
 At 31 March 2016              71,117            88,880              884            21,792            15,435   198,108 
-------------------  ----------------  ----------------  ---------------  ----------------  ----------------  -------- 
 Depreciation 
 At 1 October 2015             20,929            41,294              666            10,483                 -    73,372 
 Depreciation 
  charge for the 
  period                        2,094             4,632               27             2,032                 -     8,785 
 Eliminated on 
  disposal                       (12)           (2,738)             (63)             (257)                 -   (3,070) 
 Transfer to assets 
  held for sale                     -             (238)                -                 -                 -     (238) 
 Reclassifications                  -                 8             (73)                65                 -         - 
 Translation 
  adjustment                    (658)           (1,057)             (73)             (655)                 -   (2,443) 
-------------------  ----------------  ----------------  ---------------  ----------------  ----------------  -------- 
 At 31 March 2016              22,353            41,901              484            11,668                 -    76,406 
-------------------  ----------------  ----------------  ---------------  ----------------  ----------------  -------- 
 
 Carrying amount 
-------------------  ----------------  ----------------  ---------------  ----------------  ----------------  -------- 
 
   At 31 March 2016            48,764            46,979              400            10,124            15,435   121,702 
-------------------  ----------------  ----------------  ---------------  ----------------  ----------------  -------- 
 
 At 30 September 
  2015                         51,888            45,696              329             9,973            10,017   117,903 
-------------------  ----------------  ----------------  ---------------  ----------------  ----------------  -------- 
 

10. Movement in goodwill, intangible assets and investment in joint ventures and associates

 
                                                                                   Investment 
                                                                            in joint ventures 
                                                              Intangible       and associates 
                                                   Goodwill       assets 
                                                    EUR'000      EUR'000              EUR'000 
 
 Balance at 1 October 2015                          358,213      101,693               23,079 
 Investment in computer software                          -        1,984                    - 
 Amortisation of acquired intangible assets               -      (7,309)                    - 
 Amortisation of computer software                        -      (1,285)                    - 
 Share of joint ventures' profit after tax                -            -                1,437 
 Transfer to assets held for sale                         -      (1,679)                    - 
 Translation adjustment                            (12,251)      (3,108)                (782) 
 
 Balance at 31 March 2016                           345,962       90,296               23,734 
----------------------------------------------  -----------  -----------  ------------------- 
 

11. Other reserves

 
                                                                                                    Capital 
                                         Cash flow    Share-based       Foreign      Treasury    redemption 
                                             hedge        payment      exchange        shares       reserve      Total 
                                           EUR'000        EUR'000       EUR'000       EUR'000       EUR'000    EUR'000 
 
 Balance at 1 October 2015                 (4,357)          4,762        15,182       (5,760)           250     10,077 
 Effective portion of cash flow 
  hedges                                   (3,849)              -             -             -             -    (3,849) 
 Deferred tax on cash flow hedges              481              -             -             -             -        481 
 Share-based payment expense                     -            824             -             -             -        824 
 Release from share-based payment 
  reserve                                        -        (1,904)             -             -             -    (1,904) 
 Gain on hedge of net investment in 
  foreign operations                             -              -         2,262             -             -      2,262 
 Translation adjustment 
 
        *    Continuing operations               -              -      (26,663)             -             -   (26,663) 
 
        *    Discontinued operations             -              -       (4,640)             -             -    (4,640) 
 
 Balance at 31 March 2016                  (7,725)          3,682      (13,859)       (5,760)           250   (23,412) 
------------------------------------  ------------  -------------  ------------  ------------  ------------  --------- 
 
 
                                                      Share-based                                   Capital 
                                         Cash flow                      Foreign      Treasury    redemption 
                                             hedge        payment      Exchange        shares       reserve      Total 
                                           EUR'000        EUR'000       EUR'000       EUR'000       EUR'000    EUR'000 
 
 Balance at 1 October 2014                (11,891)          5,964      (18,738)       (5,758)           250   (30,173) 
 Effective portion of cash flow 
  hedges                                     4,626              -             -             -             -      4,626 
 Deferred tax on cash flow hedges            (578)              -             -             -             -      (578) 
 Share-based payment expense                     -            965             -             -             -        965 
 Release from share-based payment 
  reserve                                        -        (2,134)             -             -             -    (2,134) 
 Loss on hedge of net investment in 
  foreign operations                             -              -      (21,722)             -             -   (21,722) 
 Translation adjustment 
 
        *    Continuing operations               -              -        66,310             -             -     66,310 
 
        *    Discontinued operations             -              -         4,205             -             -      4,205 
 Reclassification on loss of control 
  of subsidiary undertakings                     -              -         (165)             -             -      (165) 
 
 Balance at 31 March 2015                  (7,843)          4,795        29,890       (5,758)           250     21,334 
------------------------------------  ------------  -------------  ------------  ------------  ------------  --------- 
 

12. Net debt

 
                                              As at       As at       As at 
                                           31 March    31 March     30 Sept 
                                               2016        2015        2015 
                                            EUR'000     EUR'000     EUR'000 
 Current assets 
 Cash at bank and short term deposits       182,949     145,461     214,078 
 Derivative financial instruments             4,520       4,799       4,750 
 Non-current assets 
 Derivative financial instruments            13,386      29,601      22,048 
 Current liabilities 
 Interest bearing loans and borrowings     (19,106)       (767)    (20,605) 
 Finance leases                               (187)        (70)       (206) 
 Non-current liabilities 
 Interest bearing loans and borrowings    (409,565)   (453,904)   (415,824) 
 Finance leases                                (12)        (21)        (16) 
 
                                          (228,015)   (274,901)   (195,775) 
---------------------------------------  ----------  ----------  ---------- 
 

13. Provisions

 
 
                                       Deferred contingent 
                                             consideration     Onerous leases      Restructuring and other 
                                                                                                     costs     Total 
                                                   EUR'000            EUR'000                      EUR'000   EUR'000 
 
 Balance at 1 October 2015                          22,029                372                        3,790    26,191 
 Charge/(release) to income 
  statement                                            324                  -                        (369)      (45) 
 Utilised during the period                        (5,281)               (26)                      (2,050)   (7,357) 
 Unwinding of discount                                 369                  -                            -       369 
 Translation adjustment                              (587)                  -                            2     (585) 
-----------------------------  ---------------------------  -----------------  ---------------------------  -------- 
 
 Balance at 31 March 2016                           16,854                346                        1,373    18,573 
-----------------------------  ---------------------------  -----------------  ---------------------------  -------- 
 
 Non-current                                                                                                   7,167 
 Current                                                                                                      11,406 
 
 Total                                              16,854                346                        1,373    18,573 
-----------------------------  ---------------------------  -----------------  ---------------------------  -------- 
 

14. Employee benefits

 
                                                          Employee    Employee   Employee 
                                                           benefit     benefit    benefit 
                                                             asset   liability      total 
                                                           EUR'000     EUR'000    EUR'000 
 
 Employee benefit asset/(liability) at 1 October 2015       13,067    (21,567)    (8,500) 
 Current service cost                                        (994)       (233)    (1,227) 
 Curtailment gain                                                -         328        328 
 Settlement gain                                                 -       3,663      3,663 
 Interest costs                                                238       (238)          - 
 Contributions paid                                              -       6,187      6,187 
 Remeasurement gain/(loss)                                     343     (4,774)    (4,431) 
 Translation adjustment                                      (195)         186        (9) 
-------------------------------------------------------  ---------  ----------  --------- 
 
   Employee benefit asset/(liability) at 31 March 2016      12,459    (16,448)    (3,989) 
-------------------------------------------------------  ---------  ----------  --------- 
 
 
 Analysed as: 
 Assets and liabilities associated with continuing operations    12,459   (13,921)   (1,462) 
 Liabilities held for sale(1)                                         -    (2,527)   (2,527) 
--------------------------------------------------------------  -------  ---------  -------- 
                                                                 12,459   (16,448)   (3,989) 
--------------------------------------------------------------  -------  ---------  -------- 
 

(1) This scheme relates to United Drug Sangers which is included in liabilities associated with assets classified as held for sale at 30 September 2015 and 31 March 2016.

 
                                                          Employee    Employee   Employee 
                                                           benefit     benefit    benefit 
                                                             asset   liability      total 
                                                           EUR'000     EUR'000    EUR'000 
 
 Employee benefit asset/(liability) at 1 October 2014       13,553    (19,780)    (6,227) 
 Current service cost                                        (855)       (326)    (1,181) 
 Interest on scheme obligations                                213       (299)       (86) 
 Contributions paid                                              -       1,170      1,170 
 Remeasurement gain/(loss)                                     633    (15,407)   (14,774) 
 Translation adjustment                                      2,338       (254)      2,084 
-------------------------------------------------------  ---------  ----------  --------- 
 
   Employee benefit asset/(liability) at 31 March 2015      15,882    (34,896)   (19,014) 
-------------------------------------------------------  ---------  ----------  --------- 
 

As set out in the consolidated financial statements for the year ended 30 September 2015, the Group operates a number of defined benefit pension schemes which are funded by the payments of contributions to separately administered trust funds. The employee benefit asset relates to the United States pension scheme and the employee benefit liability relates to the Republic of Ireland (ROI) and Northern Ireland (NI) pension schemes. The remeasurement loss during the current period primarily relates to a decrease in the discount rates in respect of the Republic of Ireland schemes. The change in the discount rate within the schemes is reflective

of changes in bond yields during the period. The United States scheme has an actuarial gain in the current period arising from a higher than expected return on plan assets. Accrual of pension benefits within the ROI schemes ceased with effect from 31 December 2015.

On 18 September 2015 the Group announced the proposed disposal of United Drug Supply Chain Services, United Drug Sangers, TCP Group and MASTA for an aggregate cash consideration of EUR407.5 million. The disposal was approved by shareholders at an EGM on 13 October 2015 and on 1 April 2016 the Group completed the disposal of these businesses. Following completion of the disposal, the future funding obligations in respect of the NI scheme have ceased to be the responsibility of the Group. Responsibility for the funding requirements in respect of the ROI schemes remain within the Group.

During the current period, a general offer was made to the current members of the ROI schemes to transfer their accrued benefits from the schemes in exchange for a fixed monetary amount. Acceptance of the offer was at the discretion of individual members and resulted in a settlement gain of EUR3,663,000. Related professional fees amounted to EUR238,000, resulting in a net income statement gain of EUR3,425,000. EUR2,404,000 of this gain related to discontinued operations.

The principal assumptions and associated changes are as follows:

 
                                   Republic of Ireland Schemes              United States          Northern Ireland 
                                                                                   Scheme                 Scheme(1) 
                                          As at          As at         As at        As at        As at        As at 
                                       31 March        30 Sept      31 March      30 Sept     31 March      30 Sept 
                                           2016           2015          2016         2015         2016         2015 
 Rate of increase in salaries             1.75%          2.75%   2.75%-4.00%   2.75-4.00%        0.00%        0.00% 
 Rate of increase in pensions           0-1.75%        0-1.75%         0.00%        0.00%   1.80-3.20%   1.80-3.30% 
 Inflation rate                           1.75%          1.75%         2.75%        2.75%        2.40%        2.50% 
 Discount rate                            2.00%          2.70%         3.60%        4.00%        3.80%        4.00% 
 

(1) This scheme relates to United Drug Sangers which is included in liabilities associated with assets classified as held for sale at 30 September 2015 and 31 March 2016.

15. Financial instruments

The fair values of financial assets and financial liabilities, together with the carrying amounts in the condensed consolidated balance sheet at 31 March 2016, are as follows:

 
                                  Continuing 
                                  operations        Held for sale 
                                                                        Total     Total 
                          Carrying      Fair   Carrying      Fair    carrying      fair 
                             value     value      value     value       value     value 
 Financial assets          EUR'000   EUR'000    EUR'000   EUR'000     EUR'000   EUR'000 
 Trade and other 
  receivables              197,845   197,845    215,665   215,665     413,510   413,510 
 Derivative financial 
  instruments               17,906    17,906          -         -      17,906    17,906 
 Cash and cash 
  equivalents              182,949   182,949          -         -     182,949   182,949 
-----------------------  ---------  --------  ---------  --------  ----------  -------- 
                           398,700   398,700    215,665   215,665     614,365   614,365 
-----------------------  ---------  --------  ---------  --------  ----------  -------- 
 
 Financial liabilities 
 Trade and other 
  payables                 183,694   183,694    256,869   256,869     440,563   440,563 
 Interest bearing 
  loans and borrowings     428,671   432,411          -         -     428,671   432,411 
 Finance lease 
  liabilities                  199       199          -         -         199       199 
 Deferred contingent 
  consideration             16,854    16,854          -         -      16,854    16,854 
                           629,418   633,158    256,869   256,869     886,287   890,027 
-----------------------  ---------  --------  ---------  --------  ----------  -------- 
 

The fair values of the financial assets and liabilities disclosed in the above tables have been determined using the methods and assumptions set out below.

Trade and other receivables/payables

For receivables and payables, the carrying value less impairment provision, is deemed to reflect fair value where appropriate.

Cash and cash equivalents

For cash and cash equivalents, the nominal amount is deemed to reflect fair value.

Interest-bearing loans and borrowings

The fair value of interest-bearing loans and borrowings is based on the fair value of the expected future principal and interest cash flows discounted at interest rates effective at the balance sheet date and adjusted for movements in credit spreads.

Finance lease liabilities

For finance lease liabilities, the fair value is the present value of future cash flows discounted at current market rates.

Valuation techniques and significant unobservable inputs

Fair value hierarchy of assets and liabilities measured at fair value

The Group has adopted the following fair value hierarchy in relation to its financial instruments that are carried in the balance sheet at fair value as at the period end:

-- Level 1 - quoted prices (unadjusted) in active markets for identical assets or liabilities;

-- Level 2 - inputs, other than quoted prices included within Level 1, that are observable for the asset or liability either directly (as prices) or indirectly (derived from prices); and

-- Level 3 - inputs for the asset or liability that are not based on observable market data (unobservable inputs).

The following table sets out the fair value of all financial assets and liabilities that are measured at fair value:

 
                                       Level      Level       Level 
                              Total     1          2           3 
                              EUR'000    EUR'000    EUR'000     EUR'000 
Assets measured 
 at fair value 
Designated as hedging 
 instruments 
Cross currency interest 
 rate swaps                    17,906          -      17,906          - 
---------------------------  --------  ---------  ----------  --------- 
                               17,906          -      17,906          - 
   ------------------------  --------  ---------  ----------  --------- 
 
Liabilities measured 
 at fair value 
At fair value through 
 profit or loss 
Deferred contingent 
 consideration                 16,854          -           -     16,854 
                               16,854          -           -     16,854 
   ------------------------  --------  ---------  ----------  --------- 
 
 

Summary of derivatives:

 
 
                           Amount of        Related 
                           financial    amounts not                            Amount of        Related 
                  assets/liabilities      offset in       31 March             financial    amounts not       31 March 
                     as presented in    the balance           2016    assets/liabilities      offset in           2015 
                   the balance sheet          sheet            Net       as presented in    the balance            Net 
                                                                       the balance sheet          sheet 
                             EUR'000        EUR'000        EUR'000               EUR'000        EUR'000        EUR'000 
 
 Derivative 
  financial 
  assets                      17,906              -         17,906                34,400              -         34,400 
 Derivative 
  financial 
  liabilities                      -              -              -                     -              -              - 
--------------  --------------------  -------------  -------------  --------------------  -------------  ------------- 
 

All derivatives entered into by the Group are included in Level 2 and consist of cross currency interest rates swaps. The fair values of cross currency interest rate swaps are calculated as the present value of the estimated future cash flows based on the terms and maturity of each contract and using forward currency rates and market interest rates as applicable for a similar

instrument at the measurement date. Fair values reflect the credit risk of the instrument and include adjustments to take account of the credit risk of the Group entity and counterparty where appropriate.

Deferred contingent consideration

Details of movements in the period are included in note 13. The deferred contingent consideration liability arose from acquisitions completed by the Group. The fair value is determined considering the expected payment, discounted to present value using a risk adjusted discount rate. The expected payment is determined separately in respect of each individual earnout agreement taking into consideration the expected level of profitability of each acquisition. As there were no acquisitions completed in the current period or prior year, the provision for deferred consideration is in respect of acquisitions completed during 2012 and 2014.

The significant unobservable inputs have not changed since the last annual report and are as follows:

   --   forecasted average annual net revenue growth rate 9%; 
   --   forecast average EBIT growth rate 2%; and 
   --   risk adjusted discount rate 6.5%. 

Inter-relationship between significant unobservable inputs and fair value measurement:

The estimated fair value would increase/(decrease) if:

   --   the annual net revenue growth was higher/(lower); 
   --   the EBIT growth rate was higher/(lower); and 
   --   the risk adjusted discount rate was lower/(higher). 

For the fair value of deferred contingent consideration, a reasonable possible change to one of the significant unobservable inputs at 31 March 2016, holding the other inputs constant, would have the following effects:

 
                                     Increase   Decrease 
                                      EUR'000    EUR'000 
   -------------------------------  ---------  --------- 
Effect of change in assumption 
 on income statements 
Annual EBIT growth rate 
 (1% movement)                              -          - 
Annual net revenue growth 
 rate (1% movement)                         -          - 
Risk-adjusted discount 
 rate (1% movement)                        47       (49) 
----------------------------------  ---------  --------- 
 

16. Dividends

The Board has proposed an interim dividend of 3.05 cent per share. This dividend has not been provided for in the balance sheet at 31 March 2016 as there was no present obligation to pay the dividend at the reporting date. During the first half of the financial year, the final dividend for 2015 (8.10 cent per share), was paid giving rise to a reduction in shareholders' funds of EUR19,867,000.

17. Foreign currency

The principal exchange rates used in translating sterling and dollar balance sheets and income statements were as follows:

 
                                        31 March      31 March 
                                            2016          2015 
                                     EUR1=StgGBP   EUR1=StgGBP 
 Balance sheet (closing rate)             0.7916        0.7295 
 Income statement (average rate)          0.7456        0.7670 
 
                                        EUR1=US$      EUR1=US$ 
 Balance sheet (closing rate)             1.1385        1.0741 
 Income statement (average rate)          1.0986        1.1899 
 

18. Related parties .

The Group trades in the normal course of business with its joint venture undertakings. The aggregate value of these transactions is not material in the context of the Group's financial results.

The amount due from Magir Limited, the Group's joint venture investment, at 31 March 2016 was EUR7,099,000 which represents 3.0% of total gross trade receivables classified as assets held for sale. The Group has also provided a guarantee to Magir's bankers for an amount of StgGBP12,000,000 and a loan of StgGBP8,600,000.

IAS 24 Related Party Disclosures requires the disclosure of compensation paid to the Group's key management personnel. Key management personnel are those persons having authority and responsibility for planning, directing and controlling the activities of the Group. UDG Healthcare classifies directors, the Company Secretary and members of its executive team as key management personnel. This executive team is the body of senior executives that formulates business strategy along with the directors, follows through on the implementation of that strategy and directs and controls the activities of the Group on a day to day basis.

Key management personnel receive compensation in the form of short-term employee benefits, post-employment benefits and equity compensation benefits. Key management personnel received total compensation of EUR5,897,000 for the six months ended 31 March 2016 (2015: EUR4,856,000).

19. Events after the balance sheet date

On 1 April 2016 the Group completed the disposal of United Drug Supply Chain Services, United Drug Sangers, TCP Group and MASTA.

On 18 April 2016 the Group acquired Pegasus Public Relations Limited, a healthcare communications company based in the United Kingdom. The acquisition consideration of StgGBP16.8 million was comprised of a StgGBP10.1 million upfront payment and StgGBP6.7 million earn out payable for performance over three years. The initial cash payment was financed from the Group's internal resources and debt facilities.

Based on initial assessment, the fair value of the net assets and liabilities acquired are estimated to be EUR5.4 million (StgGBP4.3 million) and consist primarily of property, plant and equipment, trade and other receivables, cash, and trade and other payables.

20. Board Approval

This interim report was approved by the Board of Directors of UDG Healthcare plc on 18 May 2016.

This information is provided by RNS

The company news service from the London Stock Exchange

END

IR LLFLDEAITLIR

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May 19, 2016 02:01 ET (06:01 GMT)

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