January 30, 2018 / 7:30 AM / a year ago

Britain's UDG Healthcare expects 18-21 percent growth in full-year profit

(Reuters) - UDG Healthcare (UDG.L) said on Tuesday it expects adjusted earnings per share to increase by 18-21 percent in 2018, driven by a strong trading in the first quarter and gains from the U.S tax reform.

The company, which provides outsourced sales and marketing, drug distribution and packaging services to healthcare companies, said pre-tax profit in the first quarter of the year was well ahead of last year, helped by recent acquisitions.

UDG reported adjusted earnings per share of 37.1 cents, on a constant currency basis, for the year ended Sept. 30, 2017.

The company, which completed six acquisitions in 2017, said four of those acquisitions were performing in line with its expectations.

UDG said it would gain from a reduction in the headline US federal corporate tax rate to 21 percent from 35 percent, adding that its tax rate for 2018 is expected to be 4 percent lower than the 19 percent it had previously expected.

Operating profit at UDG’s Ashfield division, which provides clinical and commercialization services and contributed over 60 percent of the total revenue in 2017, was “significantly ahead” of the same quarter last year, the company said.

UDG’s second-largest division, Sharp, has seen a significant slowdown in profits since last year, bogged down by weaker demand for its bottled packaging services at the division’s U.S. business. Analysts expect the business to pick up by next year.

Dublin-based UDG, formerly known as United Drug, added that underlying profit growth will be largely delivered during the second half of the year.

Reporting By Justin George Varghese in Bengaluru; Editing by Saumyadeb Chakrabarty

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