Udg Healthcare Public Share Discussion Threads

[liarspoker] 11/3/2009 21:32

No problem culchi, I remain happy to hold for the long term here even though we'll see some though years. Good luck with the RCG results tomorrow. :O)

[culchi] 17/2/2009 22:55

Hi Liars, Just to let you know i sold out of udg. on friday after holding for almost seven years. put proceeds into increasing my holdings in rcg. and gng. Just think they have a lot more upside over the difficult next two years. Good luck with your holding and thanks for all your input in the past.

[liarspoker] 17/2/2009 08:53

Very interesting statement although no real surprises imo. HSE spend is down as expected, outsourcing is up and there's also a forex loss which is no real indication of how the underlying business is doing. Looks like their run of double digit growth has ended. They still have a unique position in the market, the population is still aging so in the long term record earnings should come around once again. All I would like to see in the next results is an increase in the divi and I'll be happy ( don't want to see a bloodbath of course ). Ok of to read the RTE broker notes. :O)

[liarspoker] 12/2/2009 10:15

Moving up. :O)

Perhaps forex related or news slipping ahead of AGM.

[liarspoker] 01/2/2009 23:48

Funnily enough I bought my second 'health' share last week - Sanofi Aventis - over 5% yield, new CEO, P/E of under 8, Euro denominated and Buffett is a holder too. These large pharmas generate buckets of cash. Have a look for yourself. Just buy and hold for 25 years imo. I don't even have Sanofi on my monitor. Tucked away for the long term. Only bought Euro 6K worth but will add if they fall further say sub Euro 40.

Symbol is EUROP:SAN

[culchi] 01/2/2009 21:46

Thanks liars for the link, like yourself i am looking hard at everything after the past year. It is my only euro stock at present and my portfolio has suffered from. weak sterling. I decided to opt for cash rather than udg. scribs for now. At the moment cash is king.

[liarspoker] 31/1/2009 09:30

I am still in 2 minds about holding UDG as a long term investment culchi. Returns on retained earnings are OK but not great. All other return measures are OK too but have been slipping. Perhaps that slippage has notified management that restructuring to gain greater efficiency is necessary.

Margins are low too but management seems to be acquiring higher margin businesses which has seen margins improve. Of course UDG are market leaders in Ireland with only the HSE able to pressure them. I do like the management though - they aren't pillars in the business community like Fitzpatrick (Anglo ) was but they always deliver ( didn't Anglo always deliver too ? ).

Anyhow the currency is Euro which suits me fine and the worker in the following article says that they are still busy. Not having missed a divi since 2003 I think that my current divi equates to around 4 or 4.5% so as long as dividend increase I am happy. I'm happy to see where the restructuring takes us and will decide what to do in a few years.



One worker told The Mayo News: "It came as a bit of shock really, as we are still quite busy..................

[culchi] 23/1/2009 12:34

thanks liars, just read your updates, and also brokers views this morning. Management had mentioned consolidation in sept/oct. last but yesterdays decisions appear to go further. The weakness of sterling, and new government decisions re. health cutbacks which are likely, will hit the bottom line this coming year. I think they may be moving to address this . Davys mention good business over the christmas period but overall it could be a tough year.The chairmans comments in the annual report that i liked were," we remain committed to exercising a disciplined approach in the identification of potential acquisitions. In building United Drug into an international healthcare services company ,we will continue to focus on those services that are not directly impacted by economic cycles where we believe we can add value and achieve stable growth" As you say , we may learn more at from the agm.

[liarspoker] 23/1/2009 10:59

All broker notes basically rehash the announcement with no real extra info given.

Ian Hunter from Goodbodis has the best line in which he states that for every 10 million Euro saved, earnings should increase by 13%. Or every 10m Euro saved allows for a leeway of 70m Euro ( 4% ) slip in turnover without impacting earnings based on their current model.

All analysts are waiting for the AGM to put meat on their assumptions as am I as you can see from botched post 448.

[liarspoker] 22/1/2009 19:15

Just to add that word on the street has it that Uniphar is in trouble ( strange urgent meetings at the company appearently ) which could represent a great opportunity for UDG.

[liarspoker] 22/1/2009 19:13

Hi culchi - here's something to think about:


United Drug plc
Company Statement




United Drug plc has a long term track record of ensuring that we have the most
effective structure, streamlined cost base and good people to maintain the
delivery of a high quality service to our customers. The Group confirmed to
shareholders last autumn that it had merged its wholesaling and pre-wholesaling
divisions and would be seeking to restructure these businesses around our client
needs. The Group has also made a significant number of acquisitions in recent
years and is driving synergies and efficiencies with existing operations.


As a result of these factors, and in recognition of an ongoing acute set of
economic circumstances, the Group is embarking on a restructuring programme that
is expected to achieve significant savings. This programme includes: reduced
salary and bonus costs at a senior level; redundancy programmes; and a targeted
procurement initiative. These initiatives are focused on maximising our
competitiveness in an environment where spending in all sectors will inevitably
be constrained during 2009.


The Group will provide further details of targeted annualised savings in its
next trading statement and at its AGM on February 17th. We are currently
involved in a consultation process that may result in us making up to 5% of
roles across the Group, and approximately 10% of roles across our Irish
operations, redundant. The Group employs just over 4,500 people worldwide and
approximately 900 people in the Republic of Ireland.

[culchi] 20/1/2009 10:08

hi liars, thanks for all your work on this thread ,it is appreciated. Last year is best forgotten ,what with the double whammy of sterling dropping in value.Lucky to sell my ang shares @4.50 euro on the day after government guarantee, having top sliced at 10.00 euro. So overall lucky to break even as scribs were reinvested.Like everyone else ,feel betrayed by fitzpatricks conduct. My son who works with Manifest (a corp. gov. company in london )was constantly complaining re Fitz . going straight up to chairman.Holding all the remaining stocks. Just sitting tight. Best wishes for 2009.

[liarspoker] 19/1/2009 22:36

For comparison & notes tomorrow ( sorry personal storage here :O)

[liarspoker] 19/1/2009 21:19

Added this presentation to the header:

[liarspoker] 19/1/2009 20:45

Slightly out of date ( well 'only' by 20 years ! ) but an interesting read anyway:

[liarspoker] 19/1/2009 13:00

Newly designed UDG website:

[liarspoker] 19/1/2009 12:38

A little old and probably posted on this thread previously but gives good insight into the business ( ie acquisitive vs organic growth etc ):

[liarspoker] 30/12/2008 08:14

From this mornings German share factors to watch:

CELESIO
Indicated up 4.7 percent.
The German government plans to change legislation to force drugmakers to
sell more to pharmaceutical wholesellers, Frankfurter Allgemeine Zeitung said on
Tuesday, citing a draft law it obtained. The decision could affect wholesellers
including Celesio's Gehe unit.

[liarspoker] 28/11/2008 20:57

These are bound to change although which way I do not know:

Davys forecasts:

2009 = 27.2c
2010 = 29.2c

Current price = 252c

so:

2009 P/E = 9.26
2010 P/E = 8.63

Seems cheap for a player with a majority market share. Sure there could be a regulation problem, although it seems to be sorted for the time being, and international generic competition could be a problem too, although UDG would set up an international branch to overcome that. 20+ years of uninterupted growth at fairly predictable rates too.

DL has a forecast of 28.05c.

Look at the last 5 years EPS growth:

18% - 12% - 14% - 14% - 12%

Average is 14% ( not including divi ) that's why the market, in normal conditions, put UDG on a multiple of around 16 ( 14% EPS growth plus 2% divi ).

Ok so growth might slow due to currency effects ( but 24% increase in operating profits before forex !!! ).

But.....let's assume 8% growth like davys but over 5 years:

25.93 X 1.08 yx 5 = target EPS of 38.1c

Presumably market conditions will be fairly normal in 5 years so say conservative P/E of 12 gives target price of 457c.........

that's on 8% EPS growth over the next 5 years not including divi returns/reinvestment.....hmmmm.....I bagged this from the 2003 bear in 5 years and I reckon I can do it again. :O)

Sorry for long post just thinking aloud.

[liarspoker] 28/11/2008 15:09

2008 conference call presentation: