UniPhar profits up 11%
Healthcare distribution company UniPhar has today reported profits before tax of €21.6m for the year ended December 25, 2007.
This represents an 11% increase when compared with 2006, excluding the exceptional profit of €51.3m on the sale of the group’s Belgard Road premises in 2006.
Turnover during the year increased by just more than 7% to €720m at the group, which is owned by more than 500 independent pharmacies throughout the country.
Earnings per share, excluding exceptional items, advanced by 8% to 70.4c per share during the year under review.
The directors are recommending a dividend payment of 8c per share which represents an increase of 14% per share on 2006.
Commenting on the results, the chief executive of UniPhar Plc, Mr Jim Canavan, said that the Group’s performance in 2007 had been achieved against the background of a difficult and challenging market environment.
“2007 was certainly dominated by the actions of the HSE,” he said.
“The implementation of the HSE agreement with the Irish Pharmacists Healthcare Association (IPHA) last March which reduced the price of most off patent products by 20% (with a further 15% due in January 2009) has had a dramatic impact on both our wholesaling and pre-wholesaling businesses.”
Mr Canavan said that the group had resisted all attempts by the HSE to reduce prices either at wholesale or retail level.
“The recent implementation of an 8.2% reduction in the reimbursement price paid to pharmacists, together with a further 1% reduction proposed for January 2009, has seriously angered pharmacists and has jeopardised the future viability of hundreds of pharmacies, particularly in rural areas,” he said.
“UniPhar has committed considerable resources to highlight the impact and injustice of the implementation of this initiative at the highest political levels.”
Mr Canavan said that the coming year would continue to be overshadowed by the outcome of the HSE negotiations and the Independent Body review.
“The recent reduction in reimbursement to pharmacies is a savage blow which, if not reversed, will have a serious impact on margins,” he said.
“This will create much additional pressure in the system as pharmacies seek to recover lost margins.”
Since the year end UniPhar has completed the acquisition of Forth Medical and NorthStar Orthopaedics in the UK which specialise in the sales, marketing and distribution of high value healthcare devices and orthopaedic implants and ancillaries to hospitals.
Mr Canavan added that the group’s strategy was to continue to be actively involved in pursuing appropriate acquisition opportunities.
