November 18, 2009 / 9:35 AM / 10 years ago

UPDATE 1-United Drug earnings down 9 pct, sees 2010 stable

* Year adjusted diluted EPS falls 9 pct, revenue up 2 pct

* Sees 2010 in line with this year

* Sees growth opportunities

* Shares up 0.9 pct

(Adds comment from CEO interview, share price)

By Antonella Ciancio

DUBLIN, Nov 18 (Reuters) - Irish healthcare services company United Drug UDG.I posted a 9 percent fall in full-year earnings per share but said it expected its performance next year to be similar to 2009.

The supplier of drugs and medical equipment to pharmacies, hospitals and dentists also said its restructuring and cost reduction programme resulted in a one-off charge in the year of 13.9 million euros.

“The cost benefits from this restructuring will flow into 2010 and beyond, with annualised savings of 9-10 million euros expected”, the group said in a statement.

Shares in the group were up 0.9 percent at 2.24 euros at 0930 GMT, when the main Irish market index .ISEQ was down 0.14 percent.

“Encouragingly, despite the difficult trading environment, the restructuring and cost reduction programme would appear to have had a greater impact than we anticipated, with overall operating margins coming in 20 bps ahead of forecast,” Goodbody’s analyst Ian Hunter said in a note.

Adjusted diluted earnings per share (EPS) for the 12 months to the end of September fell to 23.42 euro cents, in line with an average estimate of 23 cents, according to Thomson Reuters I/B/E/S.

Revenue grew by 2 percent to 1.72 billion euros, reflecting the fall in the value of sterling relative to the euro. On a constant currency basis sales grew 5 percent.

“Our performance forecast next year is largely in line with this year”, Chief Executive Liam Fitzgerald told Reuters.

Fitzgerald said 200 of the group’s 4,500-strong workforce had been laid off mainly in Ireland and UK as a result of the rendundancy programme in 2009, but added there shouldn’t be more next year.

The supplier, which has operations in Britain, Ireland, Holland, Belgium and the United States, said the group remained positive about the growth opportunities in its business. (Editing by Greg Mahlich)

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