REG - Uniphar PLC - 2024 Interim Results
03/09/2024 07:00
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RNS Number : 6135C Uniphar PLC 03 September 2024
Uniphar plc
2024 Interim Results
Uniphar plc, an international diversified healthcare services business,
announces its half year results for the six months ending 30 June 2024
delivering EBITDA growth of 6.3% and gross profit growth in each of its three
divisions.
FINANCIAL HIGHLIGHTS
Growth
Six months ended 30 June(1) Reported Constant
2024 2023 currency(2)
€'000 €'000
Revenue 1,367,578 1,239,582 10.3% 10.1%
Gross profit 206,697 187,992 9.9% 9.7%
Uniphar Supply Chain & Retail 95,291 88,189 8.1% 8.1%
Uniphar Medtech 53,515 51,760 3.4% 3.0%
Uniphar Pharma 57,891 48,043 20.5% 20.1%
Gross profit margin (Group) % 15.1% 15.2%
EBITDA(1,4) 55,901 52,611 6.3% 6.3%
Operating profit 32,226 28,006 15.1% 15.2%
Profit before tax excluding exceptional items 23,430 22,800 2.8% 3.0%
Net bank debt(1) (143,609) (178,045)
Basic EPS (cent) 5.6 5.5 1.8%
Adjusted EPS (cent)(1,4) 8.1 8.0 1.3%
· Gross profit growth of 9.9% (7.4% organic(3)) reflecting growth across
all divisions with Uniphar Pharma achieving organic gross profit growth of
20.2%.
· Continued strong gross profit margin of 15.1%.
· EBITDA growth of 6.3%, from €52.6m to €55.9m, reflecting the
execution of our strategy in each division and continued innovation across the
Group.
· Adjusted EPS of 8.1 cent (2023: 8.0 cent) reflective of strong EBITDA
growth offset by higher financing costs in the period.
· Continuing strong free cash flow conversion of 144% with adjusted
free cash flow conversion in line with our medium-term target.
· Robust liquidity with net bank debt of €143.6m at 30 June 2024
(December 2023: €149.9m) and leverage at 1.5x.
· The Board have declared an interim dividend of €0.0067 per ordinary
share for the period to 30 June 2024 representing growth of 5% in the period
(June 2023: €0.0064 per ordinary share).
· For the full year 2024, Uniphar expects organic gross profit growth
across all divisions in line with medium-term targets and is well positioned
to deliver on market expectations for the full year.
1. Additional information is set out in Alternative Performance Measures
(APMs) section.
2. Constant currency growth is calculated by applying the prior period's
actual exchange rate to the current period's result.
3. Organic growth is calculated as the gross profit growth of the
underlying business in the period adjusting for the contribution from prior
period acquisitions and divestments to ensure a like-for-like comparison.
4. The definition of this APM was changed in 2023 to add back share-based
payment expense as it is a non-cash expense with prior year comparatives
updated accordingly.
STRATEGIC AND OPERATIONAL HIGHLIGHTS
· Strong performance in the period delivering gross profit growth across
all divisions with continued progress towards our strategic objectives.
· Organic gross profit growth of 7.4% with growth achieved across all
divisions:
§ Uniphar Pharma: 20.5% gross profit growth of which 20.2% is organic. This
strong performance highlights our operational capabilities in the On Demand
business coupled with an excellent performance in Pharma Services.
§ Uniphar Supply Chain & Retail: 8.1% gross profit growth of which 3.0%
is organic. The division continues to perform well capitalising on robust
market demand and our strong customer service offering.
§ Uniphar Medtech: 3.4% gross profit growth, all of which is delivered
organically. This growth is delivered on the back of a very strong comparator
in 2023 with full year growth for 2024 expected to be in line with medium-term
targets.
· Robust cash flow performance with reported free cash flow conversion of
144%. When adjusted for temporary working capital benefits in June 2024, the
adjusted free cash flow is within our target range of 60% - 70%. The
favourable working capital timing benefits arise from the growth in the Pharma
Services business unit that has led to an increase in prepayments on certain
programmes.
· Net bank debt fell in the period to €143.6m from €149.9m in December
2023 representing a leverage multiple of 1.5x. The Group's strong Balance
Sheet provides long-term strategic and financial flexibility with a revolving
credit facility of €400m together with an additional uncommitted accordion
facility of €150m.
· The new divisional structure announced in 2023 has enabled the
divisions to capitalise on the attractive growth opportunities in our target
markets and better align with our customers and stakeholders during this next
phase of growth.
· M&A remains an objective of the Group in delivering its medium-term
growth targets with the Group continuing to maintain an active pipeline of
opportunities. The acquisition of the McCauleys Pharmacy Group was completed
in 2023 and is now integrated into the Group, delivering expected synergies
and elevating our retail pharmacy offering.
· The Group's strategic capital expenditure in a state-of-the-art
distribution facility in Ireland in addition to the technology investment
programme continue to progress well. Once completed, the investment will
provide the infrastructure to meet growing market demands by doubling existing
capacity levels and future proofing the market leading Supply Chain &
Retail division whilst also enabling us to scale our global pharma platform.
· Sustainability remains a key focus for the Group and progress continues
to be made across the five sustainability pillars that define our approach.
SBTi targets have been validated in 2024 with our climate ambition of at least
a 50% reduction in our absolute Scope 1 & 2 emissions by 2030.
Ger Rabbette, Uniphar Group Chief Executive Officer said:
"Uniphar has delivered a strong first half, with gross profit growth of almost
10% year on year. We are seeing the benefit of the hard work we have put in
recently to build the foundations for the next stage of growth. The
strategic investments we are making in infrastructure and IT will further
improve our ability to generate organic growth and give us a stronger platform
for integrating and achieving synergies from new acquisitions. We are
confident that we will achieve our ambitious target of €200m EBITDA in the
medium-term."
Analyst presentation
A conference call for investors and analysts will be held at 9am (BST), today,
3 September 2024. Analysts and investors who wish to participate should visit
www.uniphar.ie (http://www.uniphar.ie) to register.
A copy of the presentation and announcement will be available on our website
at the time of the call.
Contact details
Uniphar Group Tel: +353 (0) 1 428 7777
Allan Smylie
Head of Strategy and Investor Relations investor.relations@uniphar.ie (mailto:investor.relations@uniphar.ie)
Davy (Joint Corporate Broker, Nominated Adviser and Tel: +353 (0) 1 679 6363
Euronext Growth Listing Sponsor)
Daragh O'Reilly
Niall Gilchrist Ivan Murphy
RBC Capital Markets (Joint Corporate Broker) Tel: +44 (0) 20 7653 4000
Jamil Miah
Rupert Walford
Stifel Nicolaus Europe Limited (Joint Corporate Broker) Tel: +44 (0) 20 7710 7600
Matt Blawat
Ben Maddison
Francis North
Q4 PR (Public Relations Adviser to Uniphar) Tel: +353 (0) 1 475 1444
Iarla Mongey
Cautionary statement
This announcement contains certain projections and other forward-looking
statements with respect to the financial condition, results of operations,
businesses, and prospects of the Uniphar Group. These statements are based on
current expectations and involve risk and uncertainty because they relate to
events and depend upon circumstances that may or may not occur in the future.
There are a number of factors which could cause actual results or developments
to differ materially from those expressed or implied by these projections and
forward-looking statements. Any of the assumptions underlying these
projections and forward-looking statements could prove inaccurate or incorrect
and therefore any results contemplated in the projections and forward-looking
statements may not actually be achieved. Recipients are cautioned not to place
undue reliance on any projections and forward-looking statements contained
herein. Except as required by law or by any appropriate regulatory authority,
the Uniphar Group undertakes no obligation to update or revise (publicly or
otherwise) any projection or forward-looking statement, whether as a result of
new information, future events or other circumstances.
About Uniphar plc
Headquartered in Dublin, Ireland, Uniphar is an international diversified
healthcare services business servicing the requirements of more than 200
multinational pharmaceutical and medical technology manufacturers across three
divisions - Uniphar Pharma, Uniphar Medtech and Uniphar Supply Chain &
Retail. The Group is active in Europe, North America, APAC and MENA and
delivers to 160+ countries.
The Company's vision is to improve patient access to pharmaco-medical products
and treatments by enhancing connectivity between manufacturers and healthcare
stakeholders. Uniphar represents a strong combination of scale, growth, and
profitability.
Uniphar Supply Chain & Retail
Uniphar Supply Chain & Retail is the leading pharmaceutical wholesaler in
Ireland with a growing symbol group offering of retail pharmacies. The Group's
strategy for Uniphar Supply Chain & Retail is to grow our wholesale market
share, our symbol group network and our own brand, in-licenced and consumer
products portfolio.
Uniphar Medtech
Uniphar Medtech is a leading pan-European medical device distributor and
solutions partner. The Group's strategy for Uniphar Medtech is to grow our
service offering across Europe and expand our addressable market by serving
new specialities and new manufacturers.
Uniphar Pharma
Uniphar Pharma operates a global business with high value services across the
lifecycle of a pharmaceutical product. We enable pharma and biotech companies
to bring innovative medicines to global markets and provide healthcare
professionals with access to medicines they can't source through traditional
channels. Our strategy is to build a leading platform to provide the
specialist support and expertise needed to improve access to these medicines.
Overview
Uniphar Group has delivered another strong performance in the first six months
of 2024 achieving growth in gross profit and EBITDA. The Group grew gross
profit by 9.9% which translated into EBITDA growth of 6.3%. The majority of
the gross profit growth was achieved organically at 7.4% with the remainder
due to acquisitions completed in the prior year. Importantly, the growth was
achieved right across the Group with each division delivering organic gross
profit growth.
Uniphar Pharma delivered an excellent performance with gross profit growth of
20.5% with both the On Demand and Pharma Services business units driving that
growth. Uniphar Supply Chain & Retail achieved another robust performance
with 8.1% gross profit growth. Excluding the impact of the McCauley Pharmacy
Group acquisition, organic growth of 3.0% represents consistent growth across
the division. Uniphar Medtech achieved 3.4% gross profit growth against a very
strong comparator in the prior period and is confident of delivering growth in
line with its medium-term target over the full year.
EBITDA has increased by 6.3% (€3.3m) to €55.9m (June 2023: €52.6m)
reflecting primarily the organic growth achieved across all divisions in
addition to the impact of the 2023 acquisitions. This growth at the gross
profit level is partially offset with the continued investment in our teams,
technology and new business opportunities which will support the delivery of
the Group's medium-term objectives. Adjusted EPS of 8.1 cent is 0.1 cent
(1.3%) ahead of June 2023 reflecting the increased operating profits arising
from organic growth and acquisitions in the prior period partially offset by
increased financing costs in the period.
Return on capital employed (ROCE) for the rolling 12-month period closed at
14.7% (June 2023: 14.7%) and is at the upper end of the Group's medium-term
target of 12-15%. The reported ROCE is reflective of the investment in
strategic capital expenditure that will deliver improved growth and returns in
the medium term.
Technology and innovation have enabled the Group to achieve the strong market
positions it has attained over recent years. Ongoing investment in technology
is critical for the Group to remain the leader in our markets and deliver on
our medium-term objectives. The previously announced investments in a new
distribution facility in Ireland and technology upgrade programme will future
proof our market leading Supply Chain and Retail division whilst enabling us
to scale our Pharma platform. The project is progressing to plan with
implementation scheduled to be delivered initially in a non-live environment
which significantly reduces the risk on the programme.
The Group's Balance Sheet remains robust with net bank debt of €143.6m and
leverage of 1.5x being well below the Group's medium-term target of not
exceeding 2.5x. This strong cash performance includes the impact of favourable
temporary cash flow timing movements arising from the growth in the Pharma
Services business unit that has led to an increase in prepayments on certain
programmes. The cash performance is notwithstanding the significant investment
the Group made in strategic capital expenditure in the period. The Group's
banking facility consists of a €400m revolving credit facility and €150m
of an uncommitted accordion facility that supports a robust Balance Sheet to
provide the Group with long-term strategic and financial flexibility.
The Group remains focused on delivering its medium-term targets outlined in
2023, specifically the ambition to double EBITDA to €200m over the period.
These interim results represent progress towards that target and demonstrate
the confidence and commitment of our people in achieving our medium-term
objectives. Our management team have the track record of delivering on
commitments and we are confident we have the right strategy, the best people
and the market opportunity to continue to deliver for our stakeholders.
Sustainability
Sustainability remains a key focus for the Group and a core principle of how
we operate day-to-day. The Group has identified five sustainability pillars
that define our approach and we continue to make progress against each of the
pillars.
In April 2024 SBTi (Science Based Targets Initiative) validated the
science-based greenhouse gas emissions reduction targets submitted by Uniphar
plc to reduce absolute Scope 1 & 2 emissions by at least 50% by 2030.
Furthermore, as part of our commitment to SBTi we have also submitted a target
that over 70% of our suppliers (by emissions) covering purchased goods and
services will have science-based targets for emissions by 2027. In order to
achieve this, we have commenced an active supplier engagement programme in the
period.
The Group's commitment to sustainability is reflected in our ongoing support
of the 100 Million Trees project for the 2023/2024 planting season throughout
Ireland. The Group also continues to focus on maintaining strong ratings from
external rating agencies with our most recent ratings with CDP being "B" and
MSCI being "AAA".
Current trading
Uniphar enters the second half of this year with strong trading momentum
remaining confident of delivering on current year EPS expectations with the
Group continuing to perform in line with the Board's expectations.
Outlook
Uniphar remains well positioned to achieve continued gross profit growth in
each division in line with our medium-term targets and is confident of
delivering on current market expectations for the full year.
The Group announced an ambitious target in 2023 to grow Group EBITDA to
€200m over the medium-term. This target will be achieved through a
combination of strong organic growth across each division complemented by
earnings accretive M&A.
The medium-term targets for gross profit growth announced in 2023 also remain
unchanged:
· Uniphar Pharma: Double digit
· Uniphar Medtech: High-single digit
· Uniphar Supply Chain & Retail: Low-single digit
Disciplined capital allocation remains a focus for the Group and M&A is
expected to continue to play an important role in Uniphar's growth strategy.
The Group has an active pipeline of acquisition opportunities to add further
capability to our existing platform.
In addition to the headline EBITDA growth target, the Group's broader
medium-term guidance is as follows:
· Target ROCE of 12% - 15%
· Adjusted free cash flow conversion of 60% - 70%
· Progressive dividend policy
· Net bank debt / EBITDA not to exceed 2.5x
Acquisitions and integration update
Uniphar continues to evaluate potential acquisition opportunities and
maintains an active pipeline of opportunities to further expand our capability
and geographic reach. The Group maintains a disciplined approach to capital
allocation and remains committed to ensuring capital is deployed in
investments that deliver a Return on Capital Employed within our target range
of 12% - 15% within three years.
Strategic capital expenditure
Uniphar's track record of investment in technology has been a critical enabler
of the Group's transformational growth journey to date. As previously
announced, the Group has commenced a multi-year strategic investment programme
in an Irish-based distribution facility together with the IT platform to
maximise the efficiency of the facility. This facility will incorporate the
latest technologies to enable the business to drive operational efficiencies
and provide the infrastructure to double current capacity levels in the Supply
Chain & Retail division. The IT investment will provide the foundation to
future proof this market-leading division whilst enabling us to scale our
global pharma platforms and is a key component in achieving our medium-term
target of €200m EBITDA. The investment programme is progressing in line with
plan.
Principal Risks and Uncertainties
The Group's Risk Management Policy provides the framework to identify, assess,
monitor, and manage the risks associated with the Group's business. It is
designed to enable the Group to meet its business objectives by appropriately
managing, rather than eliminating, these risks. The principal risks &
uncertainties faced by the Group can be found in the 2023 Annual Report on
pages 66 to 70. A copy of the Annual Report can be downloaded from our website
www.uniphar.ie.
2024 Highlights
The Group continues to ensure that the risk management framework is integrated
in the day-to-day activities across the business. During the period ended 30
June 2024, the Group carried out the following:
· Reviewed the Group Risk Register, updating for all the key risks
facing the Group at this time; and
· Performed a review of emerging and new risks, in particular
economic and geopolitical risk.
The key principal risks and uncertainties faced by the Group are summarised as
follows:
Strategic Risks
· Economic and geopolitical risk - The global macroeconomic, regulatory,
political, and legal environment may impact the markets in which we operate
and in turn our client and supplier base. This may adversely affect the
financial and operational results of the Group.
· M&A & strategic growth - Growth through acquisition and
organic growth into both existing and new markets continues to remain a key
strategy for the Group. Failure to integrate acquisitions successfully along
with increased operational complexity in new markets may directly impact the
Group's projected growth.
· Key personnel & succession planning - Failure to attract, retain and
develop the skills and expertise of its people may adversely impact the
Group's performance especially in constrained labour markets.
· Market perception & reputational risk - Failure to deliver in line
with market expectations may result in reputational damage, impacting the
Group's ability to achieve its strategic targets.
· Loss of competitive position - Failure of the Group to respond to any
changes in the environment in which it operates may result in loss of market
share, which may put pressure on profitability and margins.
· Environment & sustainability - The increasing global focus on
environmental and sustainability governance is recognised by the Group, and by
its stakeholders. Failure to appropriately assess, monitor and manage the
Group's impact on the environment and the communities in which it operates may
result in reputational damage, impacting the Group's ability to deliver
results. Furthermore, failure to comply with mandatory reporting obligations
may impact the Group's financial and operational results.
· Transformational project execution - The Group has embarked on several
transformational projects that will provide the platform and capacity to grow
over the coming years. Failure of the Group to effectively deliver such
projects may result in cost overruns or reputational damage impacting the
Group's ability to deliver strategic targets.
Operational Risks
· Cybercrime - Failure to protect against the ongoing threat of a
cyber-attack could lead to a breach in security, impacting operations,
financial transactions, and sensitive information. The knock-on impact from an
attack on one of our business partners is also an area of risk for the Group.
· IT systems - Digital capabilities are a specific strategic offering of
Uniphar. Any interruption or downtime may have a negative impact on the
Group's operations, financial, and competitive positions.
· Business interruption - External factors such as natural disasters,
environmental hazard or industrial disputes may result in potential lost sales
and loss of customer loyalty.
· Health & safety - Failure to implement and follow proper health and
safety procedures may have adverse effects on employees or patients.
· Laws, regulations & compliance - Failure to operate under any of
the stringent laws and regulations the Group is subject to could result in
financial penalties, reputational damage and a risk to business operations.
Financial Risks
· Foreign currency - The Group's reporting currency is Euro. Exposure to
foreign currency is present in the normal course of business in respect of the
Group's operations in jurisdictions outside of the Eurozone.
· Treasury - The Group is exposed to liquidity, interest rate and
credit risks. The Group is exposed to increases in interest rates and credit
risks arising from changes to economic conditions.
Business Reviews
Uniphar Supply Chain & Retail
Growth
Six months ended 30 June 2024 2023 Reported Constant
€'000 €'000 currency
Revenue 890,859 831,683 7.1% 7.1%
Gross profit 95,291 88,189 8.1% 8.1%
Gross profit margin % 10.7% 10.6%
Overview
The Supply Chain & Retail division comprises of our pre-wholesale and
wholesale pharmaceutical distribution business, with approximately 1,900
community pharmacy customers and a vertically integrated model with 430 owned,
franchised or supported pharmacies. Uniphar holds c.54% of the current
wholesale market share and is an essential part of the national health
infrastructure in Ireland.
H1 2024 performance
The Supply Chain & Retail division provides a market-leading service
offering and product range to our customers which is demonstrated by another
period of growth. Each of the three components of the vertically integrated
business grew in the period and continues to deliver on their objectives.
Key highlights from the period include:
· 8.1% growth in gross profit of which 3.0% is organic growth.
· Continued growth in gross profit margin to 10.7% (June 2023:
10.6%).
· Good category growth in high tech and GLP-1 medicines
capitalising on product category trends.
· Continued strong growth across the retail estate as the largest
retail operator in Ireland.
· First year of a multi-year strategic investment programme to
expand capacity in the division progressing to plan.
Supply Chain
The Wholesale business supplies critical medicines to pharmacies and hospitals
in Ireland efficiently, reliably and securely to positively impact the health
of patients and their families. The business performed well in the period,
growing gross profit as a result of volume growth in the market combined with
market share growth. Medicine shortages continue to be a feature of the market
but have stabilised compared to the challenges seen in recent years. The
pre-wholesale business supports pharmaceutical manufacturers with tailored and
innovative distribution solutions to bring their products to the Irish market.
This business performed well in the period driven by the underlying patient
demand for innovative products especially high tech and GLP-1 medicines.
Retail
Our Retail pharmacy business comprises 430 pharmacies that are owned,
franchised or supported by the Group. The business operates across four brands
- Hickeys, McCauleys, Allcare and Life Pharmacy - and together form the
largest pharmacy group in Ireland. As a vertically integrated business the
Group is focused on leveraging its supplier relationships to continue to
deliver market leading product offerings to meet its patient and consumer
needs. The retail pharmacy business performed well in the period against the
backdrop of challenging consumer sentiment. The retail business continues its
digital journal with a key focus on enabling customers to fulfil their
evolving healthcare needs online in a simple and easy to use manner.
Outlook
Supply Chain & Retail has consistently delivered sustained growth and
innovation in recent years. The division is well positioned to deliver on its
medium-term objective of low single-digit organic gross profit growth both in
the current year and over the medium-term.
Uniphar Medtech
Growth
Six months ended 30 June 2024 2023 Reported Constant
€'000 €'000 currency
Revenue 132,545 128,835 2.9% 2.5%
Gross profit 53,515 51,760 3.4% 3.0%
Gross profit margin % 40.4% 40.2%
Overview
Uniphar Medtech is the partner of choice for manufacturers seeking to bring
innovative Medtech products to market. The division provides full end-to-end
expertise across sales, service, marketing, quality, compliance, regulatory
and market access across a pan-European platform. Our business represents the
majority of the world's top medical device manufacturers where over half our
employees are clinically trained professionals. The business is headquartered
in Ireland with a presence in 16 markets primarily across Europe together with
a bespoke offering in the US.
H1 2024 Performance
Uniphar Medtech delivered gross profit growth of 3.4% in H1 2024, all of which
was organic. This growth builds on a strong comparative in the prior period
which was driven by the timing of some significant capital equipment sales in
the period.
Key highlights from the period include:
· Gross profit growth of 3.4% all of which was delivered
organically.
· Consistent gross profit margin of 40.4% (June 2023: 40.2%).
· Increase in number of manufacturers represented in more than one
geography to 73 (June 2023: 72).
· Continued growth driven through the integration of our wider
European platform.
· Division currently operating across 16 countries primarily in
Europe (June 23: 15 countries).
Division review
Uniphar Medtech has expertise across a wide range of specialisms with market
leading positions in interventional cardiology/radiology, orthopaedics,
ophthalmology, minimally invasive surgery, diagnostic imaging and critical
care. Uniphar Medtech holds long-standing exclusive distribution agreements
with some of the world's pre-eminent manufacturers of medical devices.
The Medtech business continues to execute on its strategic growth objective by
leveraging existing manufacturer relationships into new clinical specialities,
markets and geographies. The division now operates under the common Uniphar
Medtech brand and platform across Europe providing the structure to support
our customers across the continent. The division recently established a
presence in the US with a bespoke offering to support our customers who wish
to expand into that market.
Outlook
The outlook for the Medtech division is strong as the business is well
positioned to capitalise on the structural growth drivers in the industry. The
first half of 2024 witnessed a number of key new deals being signed along with
continued investment to drive future growth across all key markets. The
division is confident of achieving its medium-term target of high-single digit
organic gross profit growth and of delivering such growth in the current year.
Uniphar Pharma
Growth
Six months ended 30 June 2024 2023 Reported Constant
€'000 €'000 currency
Revenue 344,174 279,064 23.3% 22.6%
Gross profit 57,891 48,043 20.5% 20.1%
Gross profit margin % 16.8% 17.2%
Overview
Uniphar Pharma is a global business that provides integrated high value
services across the lifecycle of a pharmaceutical product. The business works
with pharma and biotech companies to meet the challenges of today's healthcare
market, whether it is bringing innovative medicines to global markets or
providing healthcare professionals with access to medicines they cannot source
through traditional channels.
H1 2024 Performance
Uniphar Pharma delivered very strong gross profit growth of 20.5%, with strong
performances in both the On Demand and Pharma Services business units driven
by market demand in addition to new business wins.
Key highlights from the period include:
· Strong gross profit growth of 20.5% of which 20.2% is organic
growth.
· Expanded Access Programs (EAPs) continue to be a source of growth
with 9 new EAPs awarded in the period and 98 in total.
· Growth in the On Demand business has been strong driven by demand for
unlicenced, difficult to source and short supply medicines.
· The division continues to expand internationally with 70% of the
division's gross profit generated outside of Ireland.
On Demand
The On Demand business is a leading supplier of unlicenced, difficult to
source and short supply medicines to healthcare professionals globally. The
business delivered a very strong performance in the period by effectively
servicing customer demand for medicines that they were unable to source
through traditional service channels. The business continues to expand its
global platform and leverage its global sourcing capabilities. A focus for the
business for the remainder of 2024 is to continue to expand its footprint into
new European markets through the platform provided by the BModesto acquisition
and the deep logistics knowledge from our Supply Chain & Retail division.
Pharma Services
Pharma Services focuses on meeting the needs of global pharma and biotech
companies in bringing their innovative products to markets and patients around
the world. Expanded Access Programs (EAPs) continue to demonstrate growth in
both the number of EAPs and the scale and scope of existing programmes. The
Pharma Services business also saw a number of new contracts awarded to provide
bespoke service solutions to clients with the division continuing to gain good
momentum in its commercialisation services pipeline. The Group's new
purpose-built facility in North Carolina is now operational offering a range
of services including clinical trial product sourcing and supply.
Outlook
Uniphar Pharma was reorganised and rebranded in 2023 and the integrated
service offering has been well received by customers. The division's target
over the medium-term is to deliver double digit organic gross profit growth
and the performance in H1 2024 highlights the opportunity for the division.
The division is confident of delivering organic gross profit growth for the
full year in line with its medium-term target.
Financial Review
Summary financial performance
Growth
Six months ended 30 June 2024 2023 Reported Constant
€'000 €'000 currency
IFRS measures
Revenue 1,367,578 1,239,582 10.3% 10.1%
Gross profit 206,697 187,992 9.9% 9.7%
Operating profit 32,226 28,006 15.1% 15.2%
Basic EPS (cent) 5.6 5.5
Alternative performance measures
Gross profit margin 15.1% 15.2%
EBITDA 55,901 52,611 6.3% 6.3%
Adjusted EPS (cent) 8.1 8.0
Net bank debt (143,609) (178,045)
Return on capital employed 14.7% 14.7%
Revenue and Gross Profit
Revenue increased by 10.3% which was achieved through organic growth across
the three divisions complemented by the full period impact of acquisitions
completed in the prior year. Gross profit grew by 9.9% in the period with
Gross profit margin remaining broadly consistent at 15.1%.
Divisional gross profit
Growth
Six months ended 30 June Constant
2024 2023 Reported Currency
€'000 €'000
Uniphar Supply Chain & Retail 95,291 88,189 8.1% 8.1%
Uniphar Medtech 53,515 51,760 3.4% 3.0%
Uniphar Pharma 57,891 48,043 20.5% 20.1%
206,697 187,992 9.9% 9.7%
EBITDA
EBITDA has increased by €3.3m (6.3%) to €55.9m. This is driven by the
organic growth in revenue and gross profit together with the impact of the
acquisitions completed in the past year. Overheads have increased as a result
of increased investment in people, technology and new business streams
building the platform for the Group's next phase of growth.
Exceptional items
Exceptional costs amounted to €3.9m for the period and primarily relate to
redundancy and restructuring costs (€2.0m), professional fees associated
with acquisitions (€1.2m), loss on disposal of businesses and assets
(€0.4m), strategic business transformation costs (€0.3m), acquisition
integration costs (€0.3m) and other costs (€0.1m). These costs are offset
by an exceptional income tax expense credit (€0.4m). Further details are
provided in note 3.
Earnings per share
Basic earnings per share increased from 5.5 cent to 5.6 cent. The increase in
earnings is primarily due to an increase in the profit attributable to owners
of €0.4m in the period. The weighted average number of shares in the period
is 273,015,000 (June 2023: 272,815,000). The weighted average number of
ordinary shares in 2023 includes the effect of shares granted under the LTIP
arrangement that have met the share price performance conditions but will not
vest until 31 December 2024.
Adjusted earnings per share has increased from 8.0 cent to 8.1 cent reflecting
the increased operating profits arising from organic growth and acquisitions
in the prior period partially offset by increased financing costs in the
period.
On a like for like basis, adjusted earnings per share increased from 8.0 cent
to 8.1 cent by applying the weighted average number of shares as at June 2024
to both periods.
Cash flow and net bank debt
Reported free cash flow conversion in the six months to 30 June 2024 was
143.8% (June 2023: 25.1%) reflecting temporary favourable working capital
positions in 2024 arising from the timings of prepayments in the Uniphar
Pharma division. The Group's net bank debt amounted to €143.6m at June 2024
reflecting a decrease from December 2023 of €6.3m primarily driven by
favourable working capital movements offset by investments in strategic
capital expenditure programmes in the period. During 2023, the Group exercised
an option to purchase a property it leases in Citywest, Dublin which will
result in an outflow of €31.2m once it proceeds to completion later in the
year.
Six months ended 30 June 2024 2023
€'000 €'000
Net cash inflow/(outflow) from operating activities 64,527 (12,996)
Net cash outflow from investing activities (44,053) (62,829)
Net cash (outflow)/inflow from financing activities (10,818) 27,585
Foreign currency translation movement 696 194
Increase/(Decrease) in cash and cash equivalents in the period 10,352 (48,046)
Movement in restricted cash 6 -
Non-cash movement in borrowings (1,530) -
Cash flow from movement in borrowings (2,490) (38,782)
Movement in net bank debt 6,338 (86,828)
The cash inflow from operating activities of €64.5m in 2024 is reflective of
the underlying profitability of the business supported by significant
temporary favourable working capital movements as outlined above partly offset
by higher levels of interest payments compared to 2023. When adjusted for the
temporary timing positions, the adjusted free cash flow is within our target
range of 60-70%.
The net cash outflow from investing activities of €44.1m primarily consists
of capital investments (€35.4m) and payment of deferred contingent
consideration (€8.6m). Of the capital investments, €28.7m is strategic in
nature primarily relating to the strategic investment in a new distribution
facility and ERP system.
The net cash outflow from financing activities of €10.8m is primarily due to
outflows of lease principal payments (€9.6m) and dividend payments (€3.2m)
offset by net inflows from borrowings and invoice discounting facilities of
€2.5m.
Taxation
The tax expense excluding exceptional items in the period is €4.2m and
equates to an effective tax rate of 17.8%. This compares to an expense of
€4.0m in the same period last year with an effective tax rate of 17.5%. The
increase in the effective tax rate of 0.3% is reflective of the mix of
financial performance in different tax jurisdictions. The effective tax rate
is calculated as the income tax charge for the period as a percentage of the
profit before tax and exceptional items.
Foreign exchange
The Group's expansion into new geographies, and the continued growth in
existing geographies operating outside of the Eurozone, results in the primary
foreign exchange exposure for the Group being the translation of local Income
Statements and Balance Sheets into Euro for Group reporting purposes.
On a constant currency basis, revenue increased by 10.1% (vs 10.3% reported
growth), gross profit increased 9.7% (vs reported growth 9.9%) and operating
profit increased by 15.2% (vs 15.1% reported growth).
H1 2024 H1 2023
Average Average
GBP 0.8546 0.8764
US Dollar 1.0812 1.0804
Australian Dollar 1.6420 1.5977
Swedish Krona 11.389 11.326
Return on capital employed
Return on capital employed for the rolling 12-month period closed at 14.7%
(June 2023: 14.7%) performing in line with the Group's medium-term target. The
reduction of 0.5% since December 2023 (15.2%) reflects the increased
investment by the Group in strategic capital expenditure that will deliver
growth to the Group in the medium term.
Dividends
A final dividend of €3.2m relating to 2023 was paid in May 2024. The Board
has committed to a progressive dividend policy and, reflective of this, a 2024
interim dividend of €0.0067 per ordinary share has been declared. It is
proposed to pay the dividend on 4 October 2024 to ordinary shareholders on the
Company's register on 13 September 2024.
In accordance with company law and IFRS, these dividends have not been
provided for in the Balance Sheet at 30 June 2024.
Statement of Directors' responsibilities
The Directors confirm to the best of their knowledge that the condensed
consolidated interim financial statements have been prepared in accordance
with IAS 34 Interim Financial Reporting, as adopted by the EU, and to the best
of their knowledge and belief:
a) the condensed consolidated interim financial statements comprising the
Condensed Consolidated Group Income Statement, the Condensed Consolidated
Group Statement of Comprehensive Income, the Condensed Consolidated Group
Balance Sheet, the Condensed Consolidated Group Statement of Changes in Equity
and the Condensed Consolidated Group Cash Flow Statement and related notes
have been prepared in accordance with IAS 34 Interim Financial Reporting as
adopted by the EU, and are prepared in order to comply with the Euronext
Growth Market Rule Book and AIM Rules for Companies;
b) the interim results include a fair review of the important events that
have occurred during the first six months of the financial year and their
impact on the condensed consolidated interim financial statements for the half
year ended 30 June 2024.
On behalf of the Board
M. Pratt
G. Rabbette
2 September 2024
Independent review report to Uniphar plc
Report on the condensed consolidated interim financial statements
Our conclusion
We have reviewed Uniphar plc's condensed consolidated interim financial
statements (the "interim financial statements") in the 2024 Interim results of
Uniphar plc for the six month period ended 30 June 2024 (the "period").
Based on our review, nothing has come to our attention that causes us to
believe that the interim financial statements are not prepared, in all
material respects, in accordance with International Accounting Standard 34,
'Interim Financial Reporting', as adopted by the European Union.
The interim financial statements, comprise:
the Condensed Consolidated Group Balance Sheet as at 30 June 2024;
the Condensed Consolidated Group Income Statement for the period then ended;
the Condensed Consolidated Group Statement of Comprehensive Income for the
period then ended;
the Condensed Consolidated Group Cash Flow Statement for the period then
ended;
the Condensed Consolidated Group Statement of Changes in Equity for the period
then ended; and
(a) the explanatory notes to the interim financial statements.
The interim financial statements included in the 2024 Interim results have
been prepared in accordance with International Accounting Standard 34,
'Interim Financial Reporting', as adopted by the European Union.
As disclosed in note 1 to the interim financial statements, the financial
reporting framework that has been applied in the preparation of the full
annual financial statements of the group is applicable law and International
Financial Reporting Standards (IFRSs) as adopted by the European Union.
Basis for conclusion
We conducted our review in accordance with International Standard on Review
Engagements (Ireland) 2410, 'Review of Interim Financial Information Performed
by the Independent Auditor of the Entity' ("ISRE (Ireland) 2410") issued for
use in Ireland. A review of interim financial information consists of making
enquiries, primarily of persons responsible for financial and accounting
matters, and applying analytical and other review procedures.
A review is substantially less in scope than an audit conducted in accordance
with International Standards on Auditing (Ireland) and, consequently, does not
enable us to obtain assurance that we would become aware of all significant
matters that might be identified in an audit. Accordingly, we do not express
an audit opinion.
We have read the other information contained in the 2024 Interim results and
considered whether it contains any apparent misstatements or material
inconsistencies with the information in the interim financial statements.
Conclusions relating to going concern
Based on our review procedures, which are less extensive than those performed
in an audit as described in the Basis for conclusion section of this report,
nothing has come to our attention to suggest that the directors have
inappropriately adopted the going concern basis of accounting or that the
directors have identified material uncertainties relating to going concern
that are not appropriately disclosed.
This conclusion is based on the review procedures performed in accordance with
ISRE (Ireland) 2410. However future events or conditions may cause the group
to cease to continue as a going concern.
Responsibilities for the interim financial statements and the review
Our responsibilities and those of the directors
The 2024 Interim results, including the interim financial statements, is the
responsibility of, and has been approved by, the directors. The directors are
responsible for preparing the 2024 Interim results in accordance with
International Accounting Standard 34, 'Interim Financial Reporting', as
adopted by the European Union. In preparing the 2024 Interim results including
the interim financial statements, the directors are responsible for assessing
the group's ability to continue as a going concern, disclosing, as applicable,
matters related to going concern and using the going concern basis of
accounting unless the directors either intend to liquidate the group or to
cease operations, or have no realistic alternative but to do so.
Our responsibility is to express a conclusion on the interim financial
statements in the 2024 Interim results based on our review. Our conclusion,
including our Conclusions relating to going concern, is based on procedures
that are less extensive than audit procedures, as described in the Basis for
conclusion paragraph of this report. This report, including the conclusion,
has been prepared for and only for the company for management purposes and for
no other purpose. We do not, in giving this conclusion, accept or assume
responsibility for any other purpose or to any other person to whom this
report is shown or into whose hands it may come save where expressly agreed by
our prior consent in writing.
PricewaterhouseCoopers
Chartered Accountants
2 September 2024
Dublin
Notes:
The maintenance and integrity of the Uniphar plc's website is the
responsibility of the directors; the work carried out by the auditors does not
involve consideration of these matters and, accordingly, the auditors accept
no responsibility for any changes that may have occurred to the financial
statements since they were initially presented on the website.
(b) Legislation in the Republic of Ireland governing the preparation and
dissemination of financial statements may differ from legislation in other
jurisdictions.
Condensed Consolidated Group Income Statement
for the six months ended 30 June 2024
Six months ended 30 June 2024 Six months ended 30 June 2023
Pre- Exceptional Total Pre- Exceptional Total
exceptional (Note 3) exceptional (Note 3)
Unaudited Unaudited Unaudited Unaudited Unaudited Unaudited
Notes €'000 €'000 €'000 €'000 €'000 €'000
Revenue 2 1,367,578 - 1,367,578 1,239,582 - 1,239,582
Cost of sales (1,160,881) - (1,160,881) (1,051,590) - (1,051,590)
Gross profit 206,697 - 206,697 187,992 - 187,992
Selling and distribution costs (40,369) - (40,369) (38,912) - (38,912)
Administrative expenses (130,153) (3,842) (133,995) (115,177) (4,643) (119,820)
Other operating income / (expense) 272 (379) (107) 166 (1,420) (1,254)
Operating profit 36,447 (4,221) 32,226 34,069 (6,063) 28,006
Finance cost 4 (13,870) - (13,870) (11,439) 1,654 (9,785)
Finance income 4 853 - 853 170 - 170
Profit before tax 23,430 (4,221) 19,209 22,800 (4,409) 18,391
Income tax expense 5 (4,180) 357 (3,823) (3,987) 615 (3,372)
Profit for the financial period 19,250 (3,864) 15,386 18,813 (3,794) 15,019
Attributable to:
Owners of the parent 15,371 15,012
Non-controlling interests 15 7
Profit for the financial period 15,386 15,019
Basic and diluted earnings per share (in cent) 6 5.6 5.5
Condensed Consolidated Group Statement of Comprehensive Income
for the six months ended 30 June 2024
Six months ended Six months ended
30 June 30 June
2024 2023
Unaudited Unaudited
€'000 €'000
Profit for the financial period 15,386 15,019
Other comprehensive income:
Items that may be reclassified to the Income Statement:
Unrealised foreign currency translation adjustments 2,957 943
Total comprehensive income for the financial period 18,343 15,962
Attributable to:
Owners of the parent 18,328 15,955
Non-controlling interests 15 7
Total comprehensive income for the financial period 18,343 15,962
Condensed Consolidated Group Balance Sheet
as at 30 June 2024
30 June 31 December
2024 2023
Unaudited Audited
Notes €'000 €'000
ASSETS
Non-current assets
Intangible assets - goodwill 8 521,581 517,087
Intangible assets - other assets 8 51,953 44,565
Property, plant and equipment, and right-of-use assets 9 251,038 206,700
Financial assets - Investments in equity instruments 25 25
Deferred tax asset 5 15,145 11,792
Other receivables 1,284 1,458
Total non-current assets 841,026 781,627
Current assets
Inventories 197,839 184,549
Trade and other receivables 287,239 237,560
Cash and cash equivalents 96,004 85,652
Restricted Cash 179 173
Total current assets 581,261 507,934
Total assets 1,422,287 1,289,561
EQUITY
Capital and reserves
Called up share capital presented as equity 10 21,841 21,841
Share premium 176,501 176,501
Share based payment reserve 5,014 3,542
Other reserves 5,662 2,705
Retained earnings 141,041 128,213
Attributable to owners 350,059 332,802
Attributable to non-controlling interests 11 128 818
Total equity 350,187 333,620
LIABILITIES
Non-current liabilities
Borrowings 12 239,184 222,604
Deferred contingent consideration 13 27,698 31,538
Provisions 1,777 1,752
Lease obligations 14 158,394 126,083
Total non-current liabilities 427,053 381,977
Current liabilities
Borrowings 12 608 13,168
Deferred contingent consideration 13 40,791 43,523
Lease obligations 14 20,051 20,134
Trade and other payables 577,787 490,283
Corporation tax 5,810 6,856
Total current liabilities 645,047 573,964
Total liabilities 1,072,100 955,941
Total equity and liabilities 1,422,287 1,289,561
Condensed Consolidated Group Statement of Changes in Equity
for the six months ended 30 June 2024
Other Reserves
Share Share Share based payment reserve Foreign Revaluation Capital Retained Attributable Total
capital premium currency reserve redemption earnings to non- Equity
translation reserve controlling
reserve interests
€'000 €'000 €'000 €'000 €'000 €'000 €'000 €'000 €'000
At 1 January 2023 21,841 176,501 718 1,248 700 60 88,476 239 289,783
Profit for the financial period - - - - - - 15,012 7 15,019
Other comprehensive income:
Movement in foreign currency translation reserve - - - 943 - - - - 943
Transactions recognised directly in equity:
Movements in share-based payment reserve - - 1,485 - - - - - 1,485
Dividends paid (Note 7) - - - - - - (3,085) - (3,085)
At 30 June 2023 Unaudited 21,841 176,501 2,203 2,191 700 60 100,403 246 304,145
At 1 January 2024 21,841 176,501 3,542 1,945 700 60 128,213 818 333,620
Profit for the financial period - - - - - - 15,371 15 15,386
Other comprehensive income:
Movement in foreign currency translation reserve - - - 2,957 - - - - 2,957
Transactions recognised directly in equity:
Movements in share-based payment reserve - - 1,472 - - - - - 1,472
Purchase of non-controlling interest (Note 11) - - - - - - 705 (705) -
Dividends paid (Note 7) - - - - - - (3,248) - (3,248)
At 30 June 2024 Unaudited 21,841 176,501 5,014 4,902 700 60 141,041 128 350,187
Condensed Consolidated Group Cash Flow Statement
for the six months ended 30 June 2024
Six months ended Six months ended
30 June 30 June
2024 2023
Notes Unaudited Unaudited
€'000 €'000
Operating activities
Cash inflow from operating activities 15 84,262 3,770
Interest paid (9,763) (7,059)
Interest received 853 170
Interest paid on lease liabilities 14 (2,903) (2,308)
Corporation tax payments (7,922) (7,569)
Net cash inflow/(outflow) from operating activities 64,527 (12,996)
Investing activities
Payments to acquire property, plant and equipment - Maintenance (4,320) (2,426)
Payments to acquire property, plant and equipment - Strategic projects (19,073) (7,379)
Receipts from disposal of property, plant and equipment 44 1,061
Receipts from disposal of businesses (net of cash disposed and disposal 75 745
expenses)
Payments to acquire intangible assets - Maintenance (2,368) (1,209)
Payments to acquire intangible assets - Strategic projects (9,630) (2,990)
Payments to acquire subsidiary undertakings (net of cash acquired) - (23,369)
Repayment of debt acquired on acquisition of subsidiary undertakings - (22,664)
Payments on prior year acquisitions (157) (561)
Payment of deferred and deferred contingent consideration (8,624) (4,137)
Receipt of deferred consideration receivable - 100
Net cash outflow from investing activities (44,053) (62,829)
Financing activities
Proceeds from borrowings 15,050 30,000
Repayments of borrowings - (434)
(Decrease)/Increase in invoice discounting facilities (12,560) 9,216
Movement in restricted cash (6) -
Payment of dividends 7 (3,248) (3,085)
Acquisition of further equity in subsidiaries (470) -
Principal element of lease payments 14 (9,584) (8,112)
Net cash (outflow)/inflow from financing activities (10,818) 27,585
Increase/(Decrease) in cash and cash equivalents in the period 9,656 (48,240)
Foreign currency translation of cash and cash equivalents 696 194
Opening balance cash and cash equivalents 85,652 103,704
Closing balance cash and cash equivalents 16 96,004 55,658
Notes to the Consolidated Financial Statements
1. General information
Basis of preparation
The condensed consolidated interim financial statements of Uniphar plc and its
subsidiaries (the 'Group') have been prepared in accordance with IAS 34,
Interim Financial Reporting, as endorsed by the European Union.
The financial information in the condensed interim consolidated financial
statements has been prepared on a basis consistent with that adopted for the
year ended 31 December 2023. The accounting policies applied in the interim
financial statements are the same as those applied in the 2023 Annual Report.
The Group's auditors have reviewed, not audited, the condensed consolidated
interim financial statements contained in this report. These interim financial
statements are prepared in order to comply with the Euronext Growth Market
Rule Book and AIM Rules for Companies and are not statutory financial
statements as they do not include all of the information required for full
annual financial statements and should be read in conjunction with the Uniphar
Group Annual Report (statutory financial statements) for the year ended 31
December 2023. 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.
The preparation of interim financial statements in compliance with IAS 34
requires management to make estimates and assumptions that affect the reported
amount of assets and liabilities and disclosure of contingent assets and
liabilities at the date of the interim financial statements and the reported
amounts of revenue and expenses during the reporting period. Actual results
could differ from those estimates. The areas involving a high degree of
judgement or complexity, or areas where assumptions and estimates are
significant to the financial statements are disclosed in the Group's Annual
Report for the year ended 31 December 2023 in note 1 on pages 148 to 149.
The Group's interim financial statements are prepared for the six-month period
ended 30 June 2024. The interim financial statements incorporate the Company
and all of its subsidiary undertakings. A subsidiary undertaking is
consolidated by reference to whether the Group has control over the subsidiary
undertaking. The Group controls an entity when the Group is exposed to, or has
rights to, variable returns from its involvement with the entity and has the
ability to affect those returns through its power to direct the activities of
the entity.
Uniphar plc is incorporated in the Republic of Ireland under registration
number 224324 with a registered office at 4045 Kingswood Road, Citywest
Business Park, Co. Dublin, D24 V06K.
Going Concern
The Group Condensed Consolidated Interim Financial Statements have been
prepared on the going concern basis of accounting. The Directors have made
appropriate enquiries and carried out a thorough review of the Group's
forecasts, projections, and available banking facilities taking account of
committed outflows including deferred contingent consideration and committed
capital expenditure. Consideration was also given to possible changes in
trading performance and potential business risk. The forecasts indicate
significant liquidity headroom will be maintained above the Group's borrowing
facilities and applicable financial covenants will be met throughout the
period.
The Group has a robust capital structure with strong liquidity, supported into
the future by the banking facility, with a remaining term extending to August
2027 (with an option to extend by a further one year). The Group renewed and
expanded its banking facility during 2022, to provide it with the platform to
fund continued growth.
Having regard to the factors outlined above, the Directors have a reasonable
expectation that the Group has adequate resources to continue in operational
existence for the foreseeable future, being a period of 12 months from the
date of approval of these interim financial statements. As a result, the
Directors consider that it is appropriate to continue to adopt the going
concern basis in preparing the interim financial statements.
New Standards, Amendments, and Interpretations
The following standards and interpretations are effective for the Group from 1
January 2024 but do not have a material effect on the results or financial
position of the Group:
- Classification of Liabilities as Current or Non-current and Non-current
liabilities with covenants - Amendments to IAS 1
- Supplier finance arrangements - Amendments to IAS 7 and IFRS 7
- Lease Liability in a Sale and Leaseback - Amendments to IFRS 16
New Standards and Interpretations not yet adopted
Certain new accounting standards and interpretations have been published that
are not mandatory for 30 June 2024 reporting periods and have not been adopted
by the Group. These standards are not expected to have a material effect on
the results or financial position of the Group.
2. Revenue
2024 2023
€'000 €'000
Revenue 1,367,578 1,239,582
2024 2023
€'000 €'000
Uniphar Supply Chain & Retail 890,859 831,683
Uniphar Medtech 132,545 128,835
Uniphar Pharma 344,174 279,064
Total Revenue 1,367,578 1,239,582
Segmental information
Segmental information is presented in respect of the Group's geographical
regions and operating segments. The operating segments are based on the
Group's management and internal reporting structures.
Geographical analysis
The Group operates in three principal geographical regions being the Republic
of Ireland, the Netherlands and the UK. The Group also operates in several
other European countries, the US and Asia Pacific region which are not
material for separate identification.
The following is a geographical analysis presented in accordance with IFRS 8
"Operating Segments" which requires disclosure of information about the
country of domicile (Ireland) and countries with material revenue.
2024 2023
€'000 €'000
Ireland 1,018,715 947,387
UK 133,326 74,455
The Netherlands 112,373 117,775
Rest of the World (ROW) 103,164 99,965
1,367,578 1,239,582
Operating segments
IFRS 8 "Operating Segments" requires the reporting information for operating
segments to reflect the Group's management structure and the way the financial
information is regularly reviewed by the Group's Chief Operating Decision
Maker (CODM), which the Group has defined as the Board of Directors.
The Group operates with three divisions: Uniphar Supply Chain & Retail,
Uniphar Medtech and Uniphar Pharma. These divisions align to the Group's
operational and financial management structures:
· Uniphar Supply Chain & Retail provides both pre-wholesale and
wholesale distribution of pharmaceutical, healthcare and animal health
products to pharmacies, hospitals and veterinary surgeons in Ireland. Uniphar
operates a network of pharmacies under the Life, Allcare, Hickey's and
McCauleys brands. Additionally, through the extended Uniphar symbol group, the
business provides services and supports that help independent community
pharmacies to compete more effectively;
· Uniphar Medtech provides outsourced services, specifically sales,
distribution and support services to medical device manufacturers. The
business is headquartered in Ireland with a presence in 16 markets primarily
across Europe; and
· Uniphar Pharma operates a global business with high value services
across the lifecycle of a pharmaceutical product. The business enables pharma
and biotech companies to bring innovative medicines to global markets and
provide healthcare professionals with access to medicines they cannot source
through traditional channels. Our strategy is to build a leading platform to
provide the specialist support and expertise needed to improve access to these
medicines. The division operates through its On Demand and Pharma Services
business units.
Operating segments results
The Group evaluates performance of the operational segments on the basis of
gross profit from operations.
Uniphar Medtech Uniphar Pharma Uniphar Supply Chain & Retail
Total
Six months ended 30 June 2024
€'000 €'000 €'000 €'000
Revenue 132,545 344,174 890,859 1,367,578
Gross profit 53,515 57,891 95,291 206,697
Six months ended 30 June 2023
€'000 €'000 €'000 €'000
Revenue 128,835 279,064 831,683 1,239,582
Gross profit 51,760 48,043 88,189 187,992
Assets and liabilities are reported to the Board at a Group level and are not
reported on a segmental basis.
3. Exceptional charge
2024 2023
€'000 €'000
Professional fees including acquisition costs 1,167 824
Acquisition integration costs 248 1,729
Redundancy and restructuring costs 2,026 1,007
Strategic business transformation 295 860
Loss on disposal of businesses and assets 379 1,420
Other exceptional costs 106 223
Exceptional charge recognised in operating profit 4,221 6,063
Decrease in deferred contingent consideration - (1,654)
Exceptional credit recognised in finance costs - (1,654)
Exceptional credit recognised in income tax expense (357) (615)
Total exceptional charge 3,864 3,794
Professional fees including acquisition costs
Professional fees including acquisition costs are primarily costs relating to
recent acquisitions together with costs incurred on transactions under
consideration in the period.
Acquisition integration costs
Acquisition integration costs primarily relate to costs incurred on the
integration of recent acquisitions into the expanded Group. They also include
professional fees relating to specialist industry and market insights to
optimise the integration of recent acquisitions.
Redundancy and restructuring costs
Redundancy and restructuring costs include redundancy, ex-gratia and
termination costs and other costs arising on reorganisations and recent
acquisitions.
Strategic business transformation
Strategic business transformation are costs incurred associated with
reorganising and establishing a strategic presence in the US market. The costs
include initial setup costs, relocation costs and a long-term incentive plan
associated with building a strategically significant business in the US
market.
Loss on disposal of businesses and assets
On 1 March 2024 the Group disposed of 100% of the share capital of Duffy's
Medical Hall Limited which traded as a retail pharmacy resulting in a loss on
disposal of €379,000. In the period to 30 June 2023, the Group disposed of
three retail pharmacy businesses along with a property asset resulting in a
combined loss on disposal of €1,420,000.
Exceptional credit recognised in income tax
The tax credit recognised in the tax expense is the tax impact of the
components of the Exceptional charge listed above.
4. Finance cost and Finance income
2024 2023
€'000 €'000
Finance income
Interest income (853) (170)
(853) (170)
Finance cost
Interest on lease obligations 2,903 2,308
Interest payable on borrowings and invoice discounting facilities 9,791 7,633
Fair value adjustment to deferred and deferred contingent consideration 961 1,283
Amortisation of refinancing transaction fees 215 215
Finance cost before exceptional credit 13,870 11,439
Decrease in fair value of deferred contingent consideration (note 3) - (1,654)
Exceptional credit recognised in finance cost - (1,654)
13,017 9,615
Finance costs do not include capitalised borrowing costs of €1,096,000
(2023: €187,000) on qualifying assets (Notes 8 and 9). Interest is
capitalised at the Group's weighted average interest rate for the period.
5. Taxation
Income tax expense
Income tax expense is recognised based on management's estimate of the
weighted average effective income tax rate expected for the full financial
year taking into account financial performance in the various tax
jurisdictions that the Group operates in. The effective income tax rate before
exceptional items for the period ended 30 June 2024 is 17.8% (2023: 17.5%).
OECD Pillar Two model
The Group is within the scope of the OECD Pillar Two model rules which was
enacted into Irish law on 18 December 2023 applying to accounting periods
beginning on or after 1 January 2024. The Group will fall within the scope of
Pillar Two legislation for the year ended 31 December 2024. Under the new
legislation, groups will be liable to assess their effective tax rate
(according to complex new rules) in each jurisdiction that they operate. If
the effective tax rate in any jurisdiction is less than the 15% minimum rate,
top-up taxes will be payable although they may be mitigated by certain safe
harbour exemptions. Calculated effective tax rates can exceed a tax
jurisdiction's statutory tax rate on account of items of accounting
expenditure that do not qualify for tax deduction. The Group continues to
monitor changes in tax law and is not expecting to pay top up taxes in the
period ending 31 December 2024. The IASB issued amendments to IAS 12 in
"International Tax Reform - Pillar Two Model Rules" in May 2023, providing an
exception to recognising and disclosing information about deferred tax assets
and liabilities related to Pillar Two income taxes. The Group continues to
apply the exception to recognising and disclosing information about deferred
tax assets and liabilities related to Pillar Two income taxes.
Deferred tax asset
The movement in the deferred tax asset primarily reflects the Group's expected
utilisation of tax losses associated with the parent company, Retail pharmacy
and Pharma division businesses in Ireland and overseas. Carried forward tax
losses can be used to shelter future taxable profits in the same business. In
certain tax jurisdictions, current year tax losses can be surrendered to other
tax profitable Group companies in the same tax jurisdiction at the time of tax
return filing. The Directors expect that the Group's net deferred tax asset
will be recoverable against future taxable income over the medium term.
6. Earnings per share
Basic and diluted earnings per share for the six months ended 30 June have
been calculated by reference to the following:
2024 2023
Profit for the financial period attributable to owners (€'000) 15,371 15,012
Weighted average number of shares ('000) 273,015 272,815
Earnings per ordinary share (in cent):
- Basic 5.6 5.5
- Diluted 5.6 5.5
Adjusted earnings per share has been calculated by reference to the following:
2024 2023
€'000 €'000
Profit for the financial period attributable to owners 15,371 15,012
Exceptional charge recognised in operating profit (note 3) 4,221 6,063
Exceptional credit recognised in finance costs (note 3) - (1,654)
Exceptional credit recognised in income tax (note 3) (357) (615)
Tax credit on acquisition related intangibles (190) (174)
Share-based payments 1,472 1,485
Amortisation of acquisition related intangibles (note 8) 1,706 1,636
Profit after tax excluding exceptional items 22,223 21,753
Weighted average number of shares in issue in the period (000's) 273,015 272,815
Adjusted basic and diluted earnings per ordinary share (in cent) 8.1 8.0
The weighted average number of ordinary shares in 2023 includes the effect of
shares granted under the LTIP arrangement that have met the share price
performance conditions during the period but will not vest until 31 December
2024.
7. Dividends
A final dividend of €3.2m (€0.0119 per ordinary share) relating to 2023
was declared and paid in May 2024 (May 2023: €3.1m). Continuing with the
Board's commitment to a progressive dividend policy, the Board declared a 2024
interim dividend of €0.0067 per ordinary share. It is proposed to pay the
dividend on 4 October 2024 to ordinary shareholders on the Company's register
on 13 September 2024.
In accordance with company law and IFRS, these dividends have not been
provided for in the Balance Sheet at 30 June 2024.
8. Intangible assets
Computer Trademark & licences Goodwill Technology assets Brand Customer Relationships Total
software €'000 €'000 Names €'000
€'000 €'000 €'000 €'000
Cost
At 1 January 2024 54,718 204 535,796 3,432 22,185 3,207 619,542
FX movement 40 (1) 4,806 85 - 103 5,033
Additions 10,181 - - - - - 10,181
Disposals/retirements (136) - (312) - - - (448)
At 30 June 2024 64,803 203 540,290 3,517 22,185 3,310 634,308
Accumulated Amortisation
At 1 January 2024 30,676 164 18,709 1,844 4,466 2,031 57,890
FX movement 9 (1) - 39 - 69 116
Amortisation 1,192 6 - 269 1,109 328 2,904
Disposals/retirements (136) - - - - - (136)
At 30 June 2024 31,741 169 18,709 2,152 5,575 2,428 60,774
Net book amounts
At 31 December 2023 24,042 40 517,087 1,588 17,719 1,176 561,652
At 30 June 2024 33,062 34 521,581 1,365 16,610 882 573,534
Included in intangible assets are assets under construction with a net book
value of €25,220,000 (31 December 2023: €16,663,000). Amortisation has not
commenced on these assets.
Reconciliation to Balance Sheet 30 June 31 December
2024 2023
€'000 €'000
Intangible assets- goodwill 521,581 517,087
Intangible assets- other assets 51,953 44,565
Intangible assets total 573,534 561,652
Impairment testing of goodwill
Goodwill is not amortised but it is tested for impairment annually, or more
frequently if events or changes in circumstances indicate that it might be
impaired, and is carried at cost less accumulated impairment losses. An
impairment loss is recognised for the amount by which the carrying amount
exceeds its recoverable amount. The recoverable amount is the higher of an
asset's fair value less costs of disposal and value in use. For the purposes
of assessing impairment, assets are grouped at the lowest levels for which
there are separately identifiable cash inflows which are largely independent
of the cash inflows from other assets or groups of assets (CGUs).
There is no material change to the circumstances that existed at 31 December
2023 and consequently no impairment indicators were identified. The Group's
annual impairment assessment will be performed at 31 December 2024.
9. Property, plant and equipment, and right-of-use assets
Land and Leasehold Plant and Fixtures and Computer Motor Instruments Total
buildings improvements equipment fittings equipment vehicles
€'000 €'000 €'000 €'000 €'000 €'000 €'000 €'000
Cost
At 1 January 2024 182,562 26,538 54,447 15,337 8,389 8,238 7,731 303,242
Foreign exchange movement 493 106 149 82 21 39 - 890
Additions 40,794 5,350 10,006 460 1,314 1,164 501 59,589
Disposals/retirements (1,259) (294) (942) (742) (1,585) (1,448) (172) (6,442)
At 30 June 2024 222,590 31,700 63,660 15,137 8,139 7,993 8,060 357,279
Accumulated depreciation
At 1 January 2024 48,358 7,782 20,121 6,924 4,990 3,464 4,903 96,542
Foreign exchange movement 174 16 57 61 4 15 - 327
Charge for the period 8,476 1,012 1,525 1,078 698 1,360 929 15,078
Disposals/retirements (805) (258) (919) (733) (1,568) (1,270) (153) (5,706)
At 30 June 2024 56,203 8,552 20,784 7,330 4,124 3,569 5,679 106,241
Net book value
At 31 December 2023 134,204 18,756 34,326 8,413 3,399 4,774 2,828 206,700
At 30 June 2024 166,387 23,148 42,876 7,807 4,015 4,424 2,381 251,038
Reconciliation to Balance Sheet
Property, plant and equipment 7,149 23,148 42,788 7,807 4,015 422 2,381 87,710
Right-of-use assets 159,238 - 88 - - 4,002 - 163,328
Net book value at 30 June 2024 166,387 23,148 42,876 7,807 4,015 4,424 2,381 251,038
Included in property, plant and equipment are assets under construction to the
net book value of €39,942,000 (31 December 2023: €23,703,000).
Depreciation has not commenced on these assets.
10. Called up share capital presented as equity
30 June
2024
€'000
Authorised:
453.2 million (31 December 2023: 453.2 million) ordinary shares of 8c each 36,256
16.0 million (31 December 2023: 16.0 million) "A" ordinary shares of 8c each 1,280
37,536
Movement in the period in issued share capital presented as equity 30 June
2024
€'000
Allotted, called up and fully paid ordinary shares
At 1 January - 273,015,254 ordinary shares of 8c each 21,841
At 30 June - 273,015,254 ordinary shares of 8c each 21,841
Total allotted share capital:
At 30 June - 273,015,254 (31 December 2023: 273,015,254) ordinary shares 21,841
11. Non-controlling interests
Non-controlling interests own the following stakes in the issued ordinary
share capital of the entities set out below at 30 June 2024:
- 1.0% Innerstrength Limited
- 5.05% Macromed (UK) Limited.
On 14 February 2024, the Group acquired the remaining 20% shareholding in
Dialachemist Limited resulting in the entity becoming a wholly owned
subsidiary of the Group.
12. Borrowings
Bank loans are repayable in the following periods:
30 June 31 December
2024 2023
€'000 €'000
Amounts falling due within one year 608 13,168
Amounts falling due between one and five years 239,184 222,604
239,792 235,772
The Group's total bank loans at 30 June 2024 were €239,792,000 (31 December
2023: €235,772,000). Borrowing under invoice discounting (recourse) as at
the balance sheet date was €608,000 (31 December 2023: €13,168,000).
The Group's bank debt facility comprises a revolving credit facility of up to
€400,000,000 with an additional uncommitted accordion facility of
€150,000,000. This facility runs for five years to August 2027 with an
option to extend by a further one year with repayment of all loans due on
termination of the facility.
At 30 June 2024, the Group's revolving credit facility loans in use were
subject to an interest margin of +1.9% (December 2023: +1.9%) on inter-bank
interest rates (EURIBOR, GBP SONIA and USD SOFR).
Bank security
Bank overdrafts (including invoice discounting) and bank loans of
€239,792,000 (31 December 2023: €235,772,000) are secured by cross
guarantees and fixed and floating charges from the Company and certain
subsidiary undertakings.
13. Deferred contingent consideration
2024
€'000
At 1 January 2024 75,061
Unwinding of discount 961
Utilised during the period (8,994)
Foreign currency movement 1,461
At 30 June 2024 68,489
Current 40,791
Non-current 27,698
Total deferred contingent consideration 68,489
Deferred contingent consideration represents the present value of deferred
contingent acquisition consideration which will become payable based on
pre-defined performance thresholds being met. The deferred contingent
consideration liability at 30 June 2024 is €68,489,000 (2023:
€75,061,000). Significant judgement is exercised in determining the
liability indicating that the final liability may be significantly different
to the amount provided. In the event of the maximum earnout being achieved, an
additional provision of €70,292,000 would be required at 30 June 2024.
Equally, a significantly smaller liability than that estimated could arise.
14. Leases
(i) Amounts recognised in the Balance Sheet
The Balance Sheet shows the following amounts relating to leases:
30 June 31 December
2024 2023
€'000 €'000
Right-of-use assets:
Buildings 159,238 126,899
Plant and equipment 88 139
Motor vehicles 4,002 4,280
Net book value of right-of-use assets 163,328 131,318
Lease liabilities:
Current 20,051 20,134
Non-current 158,394 126,083
Total lease liabilities 178,445 146,217
Right-of-use assets are included in the line 'Property, plant and equipment'
on the Balance Sheet and are presented in note 9.
Additions to the right-of-use assets during the period ended 30 June 2024 were
€41,994,000 (30 June 2023: €2,608,000). In March 2024, the Group entered a
20-year lease agreement with a capitalised value of €37.9m for a property in
Greenogue, Dublin for the new Supply Chain & Retail distribution facility.
Lease liabilities are presented separately on the face of the Balance Sheet.
(ii) Amounts recognised in the Income Statement:
The Income Statement shows the following amounts relating to leases:
Six months ended Six months ended
30 June 30 June
2024 2023
€'000 €'000
Buildings 8,292 7,113
Plant and equipment 88 95
Motor vehicles 1,285 1,090
Right-of-use assets depreciation charge 9,665 8,298
Computer Software - 190
Right-of-use assets amortisation charge - 190
Interest on lease obligations (note 4) 2,903 2,308
Principal repayments 9,584 8,112
Total cash outflow in respect of leases 12,487 10,420
15. Reconciliation of operating profit to cash flow from operating activities
Six months ended Six months ended
30 June 30 June
2024 2023
€'000 €'000
Operating profit before exceptional items 36,447 34,069
Cash related exceptional items (2,361) (12,145)
34,086 21,924
Depreciation 15,078 13,816
Amortisation of intangible assets 2,904 3,241
Increase in inventories (13,415) (8,114)
Increase in receivables (49,456) (44,298)
Increase in payables 93,951 15,357
Share based payment expense 1,472 1,485
Foreign currency translation adjustments (358) 359
Cash inflow from operating activities 84,262 3,770
16. Analysis of net debt
30 June 31 December 30 June
2024 2023 2023
€'000 €'000 €'000
Cash and cash equivalents 96,004 85,652 55,658
Restricted cash 179 173 -
Total cash 96,183 85,825 55,658
Bank loans repayable within one year (608) (13,168) (16,706)
Bank loans payable after one year (239,184) (222,604) (216,997)
Bank loans (239,792) (235,772) (233,703)
Net bank debt (143,609) (149,947) (178,045)
Current lease obligations (note 14) (20,051) (20,134) (15,364)
Non-current lease obligations (note 14) (158,394) (126,083) (123,487)
Lease obligations (178,445) (146,217) (138,851)
Net debt (322,054) (296,164) (316,896)
17. Financial instruments
Financial instruments by category
The accounting policies for financial instruments have been applied to the
line items below:
Financial Financial Total Fair
assets at assets at value
FVOCI* amortised
cost
€'000 €'000 €'000 €'000
Financial assets
30 June 2024:
Investments in equity instruments 25 - 25 25
Trade and other receivables ** - 254,958 254,958 254,964
Cash and cash equivalents - 96,004 96,004 96,004
Restricted cash - 179 179 179
25 351,141 351,166 351,172
* Fair value through other comprehensive income.
** Excluding prepayments and accrued income.
Financial Financial Total Fair
liabilities at liabilities at value
FVTPL*** amortised
cost
€'000 €'000 €'000 €'000
Financial liabilities
30 June 2024:
Borrowings - 239,792 239,792 239,792
Trade and other payables **** - 413,682 413,682 413,682
Deferred contingent consideration 68,489 - 68,489 68,489
Lease liabilities - 178,445 178,445 178,445
68,489 831,919 900,408 900,408
*** Fair value through profit and loss.
**** Excluding non-financial liabilities.
Measurement of fair values
In the preparation of the financial statements, the Group finance department,
which reports directly to the Chief Financial Officer (CFO), reviews and
determines the major methods and assumptions used in estimating the fair
values of the financial assets and liabilities which are set out below:
Investments in equity instruments
Investments in equity instruments are measured at fair value through other
comprehensive income (FVOCI).
Trade and other receivables/trade and other payables
For receivables and payables with a remaining life of less than 12 months or
demand balances, the carrying value less impairment provision where
appropriate, is deemed to reflect fair value. The fair value of long-term
receivables is determined by discounting future cash flows at market rates of
interest at the period end.
Cash and cash equivalents, including short-term bank deposits
For short-term bank deposits and cash and cash equivalents, all of which have
a maturity of less than three months, the carrying amount is deemed to reflect
fair value.
Interest-bearing loans and borrowings
For floating rate interest-bearing loans and borrowings with a contractual
repricing date of less than six months, the nominal amount is deemed to
reflect fair value. For loans with repricing dates of greater than six months,
the fair value is calculated based on the present value of the expected future
principal and interest cash flows discounted at appropriate market interest
rates (level 2) effective at the Balance Sheet date and adjusted for movements
in credit spreads.
Deferred contingent consideration
The fair value of the deferred contingent consideration is calculated by
discounting the expected future payment to the present value. The expected
future payment represents the deferred contingent consideration which would
become payable based on pre-defined performance thresholds being met and is
calculated based on management's best estimates of the expected future cash
outflows using current budget forecasts. The provision for deferred contingent
consideration is principally in respect of acquisitions completed from 2018 to
2022.
The significant unobservable inputs are:
· Expected future profit forecasts which have not been disclosed
due to their commercial sensitivities; and
· Risk adjusted discount rate of between 2.5% and 4% (2023: between
2.5% and 4%).
For the fair value of deferred contingent consideration, a 1% increase in the
risk adjusted discount rate at 30 June 2024, holding the other inputs constant
would reduce the fair value of the deferred contingent consideration by
€0.6m. A 1% decrease in the risk adjusted discount rate would result in an
increase of €0.6m in the fair value of the deferred contingent
consideration.
Fair value hierarchy
The following table sets out the fair value hierarchy for financial
instruments which are measured at fair value.
Level 1 Level 2 Level 3 Total
€'000 €'000 €'000 €'000
Recurring fair value measurements
At 30 June 2024
Investments in equity instruments - - 25 25
Deferred contingent consideration - - (68,489) (68,489)
- - (68,464) (68,464)
There were no transfers between the fair value levels for recurring fair value
measurements during the period. The Group's policy is to recognise transfers
into and transfers out of fair value hierarchy levels as at the end of the
reporting period.
Level 1: The fair value of financial instruments traded in active markets is
based on quoted market prices at the end of the reporting period. The quoted
market price used for financial assets held by the Group is the current bid
price. These instruments are included in level 1.
Level 2: The fair value of financial instruments that are not traded in an
active market is determined using valuation techniques which maximise the use
of observable market data and rely as little as possible on entity-specific
estimates. If all significant inputs required to fair value an instrument are
observable, the instrument is included in level 2.
Level 3: If one or more of the significant inputs is not based on observable
market data, the instrument is included in level 3.
Fair value measurements using significant unobservable inputs (level 3)
The following table presents the changes in level 3 items for the period ended
30 June 2024:
Shares in Deferred Total
unlisted contingent
companies consideration
€'000 €'000 €'000
At 1 January 2024 25 (75,061) (75,036)
Utilised during the period - 8,994 8,994
Unwinding of discount* - (961) (961)
Foreign currency movement - (1,461) (1,461)
At 30 June 2024 25 (68,489) (68,464)
* These amounts have been charged to the Income Statement in finance
income/costs.
Financial risk management
The Group's operations expose it to various financial risks. The Group has a
risk management programme in place which seeks to limit the impact of these
risks on the financial performance of the Group and it is the Group's policy
to manage these risks in a non-speculative manner.
The Group has exposure to the following risks from its use of financial
instruments: credit risk, liquidity risk, currency risk, interest risk and
price risk. The condensed consolidated financial statements do not include all
financial risk management information and disclosures required in the annual
financial statements; they should be read in conjunction with the Group's 2023
Annual Report.
18. Acquisitions of subsidiary undertakings
2023 Acquisitions
The initial assessment of the fair values of the major classes of assets
acquired and liabilities assumed in respect of the acquisitions which were
completed in 2023 were performed on a provisional basis (with the exception of
McCauley Pharmacy Group which was finalised in 2023). The fair values
attributable to the assets and liabilities of these acquisitions remain
provisional with the exception of Pivot Digital Health which was completed
within the measurement period. There were no fair value adjustments made to
the comparative figures during the subsequent reporting window within the
measurement period imposed by IFRS 3.
19. Events after the reporting period
On 18 July 2024, the Group reached agreement to acquire the remaining
shareholding in Innerstrength Limited which increases the Group's shareholding
from 99.0% to 100.0%.
There have been no other material events subsequent to 30 June 2024 that would
require adjustment to or disclosure in this report.
20. Approval by the Board of Directors
The Directors approved the interim financial statements on 2 September 2024.
Additional Information
ALTERNATIVE PERFORMANCE MEASURES
The Group reports certain financial measurements that are not required under
IFRS. These key alternative performance measures (APMs) represent additional
measures in assessing performance and for reporting both internally, and to
shareholders and other external users. The Group believes that the
presentation of these APMs provides useful supplemental information which,
when viewed in conjunction with IFRS financial information, provides
stakeholders with a more meaningful understanding of the underlying financial
and operating performance of the Group and its divisions. These measurements
are also used internally to evaluate the historical and planned future
performance of the Group's operations.
During 2023, the Group amended the definition of EBITDA and Adjusted earnings
per share to add back share-based payment expense. Share-based payment expense
is a non-cash expense arising from the grant of share-based awards to
employees. This change enhances the understanding and comparability of the
financial statements as such non-cash expenses may not correlate to the
underlying performance of the business.
None of these APMs should be considered as an alternative to financial
measurements derived in accordance with IFRS. The APMs can have limitations as
analytical tools and should not be considered in isolation or as a substitute
for an analysis of results as reported under IFRS.
The principal APMs used by the Group, together with reconciliations where the
APMs are not readily identifiable from the financial statements, are as
follows:
Definition Why we measure it
EBITDA Earnings before exceptional items, net finance expense, income tax expense, EBITDA provides management with an assessment of the underlying trading
depreciation, intangible assets amortisation and share-based payment expense. performance of the Group and excludes transactions that are not reflective of
the ongoing operations of the business, allowing comparison of the trading
performance of the business across periods and/or with other businesses.
Adjusted EBITDA is used for leverage calculations.
&
Earnings before exceptional items, net finance expense, income tax expense,
depreciation, intangible assets amortisation and share-based payment expense,
adjusted for the impact of IFRS 16 and the pro-forma EBITDA of acquisitions.
Adjusted EBITDA
Net bank debt Net bank debt represents the net total of current and non-current borrowings, Net bank debt is used by management as an input into the Group's current
cash and cash equivalents, and restricted cash as presented in the Group leverage which management will consider when evaluating investment
Balance Sheet. opportunities, potential acquisitions, and internal resource allocation.
Net debt Net debt represents the total of net bank debt, plus current and non-current Net debt is used by management as it gives a complete picture of the Group's
lease obligations as presented in the Group Balance Sheet. debt including the impact of lease liabilities recognised under IFRS 16.
Leverage Net bank debt divided by adjusted EBITDA for the period. Leverage is used by management to evaluate the Group's ability to cover its
debts. This allows management to assess the ability of the company to use debt
as a mechanism to facilitate growth.
Adjusted Operating Profit This comprises of operating profit as reported in the Group Income Statement Adjusted operating profit is used to assess the underlying operating
before amortisation of acquired intangible assets and exceptional items (if performance excluding the impact of non-operational items. This is a key
any). measure used by management to evaluate the businesses operating performance.
Adjusted earnings per share This comprises of profit for the financial period attributable to owners of Adjusted EPS is used to assess the after-tax underlying performance of the
the parent as reported in the Group Income Statement before exceptional items business in combination with the impact of capital structure actions on the
(if any), amortisation of acquisition related intangibles (and tax thereon) share base. This is a key measure used by management to evaluate the
and share-based payment expense, divided by the weighted average number of businesses operating performance, generate future operating plans, and make
shares in issue in the period. strategic decisions.
Like for like adjusted earnings per share is calculated for both the current
and prior period by dividing the profit of the relevant period attributable to
& owners of the parent as reported in the Group Income Statement before Like for like adjusted EPS is used to assess the after-tax underlying
exceptional items (if any) and amortisation of acquisition related intangibles performance of the business assuming a constant share base.
and share-based payment expense, by the weighted average number of shares in
issue in the current period.
Like for Like adjusted earnings per share
Free cash flow conversion Free cash flow conversion calculated as EBITDA, less investment in working Free cash flow represents the funds generated from the Group's ongoing
capital, less maintenance capital expenditure, less foreign exchange operations. These funds are available for reinvestment, and for future
translation adjustment, divided by EBITDA. acquisitions as part of the Group's growth strategy. A high level of free cash
flow conversion is key to maintaining a strong, liquid Balance Sheet.
Return on capital employed (ROCE) ROCE is calculated as the 12 months rolling operating profit before the impact This measure allows management to monitor business performance, review
of exceptional costs and amortisation of acquisition related intangibles, potential investment opportunities and the allocation of internal resources.
expressed as a percentage of the adjusted average capital employed for the
same period. The average capital employed is adjusted to ensure the capital
employed of acquisitions completed during the period are appropriately time
apportioned.
EBITDA
Six months ended/as at Six months ended/as at
30 June 30 June
2024 2023
€'000 €'000
Operating profit Income Statement 32,226 28,006
Exceptional charge recognised in operating profit Note 3 4,221 6,063
Amortisation Note 8 2,904 3,241
Depreciation Note 9 15,078 13,816
Share-based payment expense 1,472 1,485
EBITDA 55,901 52,611
Adjust for the impact of IFRS 16 (12,127) (10,421)
Pro-forma EBITDA of acquisitions - 33
Adjusted EBITDA 43,774 42,223
Net bank debt
30 June 31 December 30 June
2024 2023 2023
€'000 €'000 €'000
Cash and cash equivalents Balance Sheet 96,004 85,652 55,658
Restricted cash Balance Sheet 179 173 -
Bank loans repayable within one year Balance Sheet (608) (13,168) (16,706)
Bank loans payable after one year Balance Sheet (239,184) (222,604) (216,997)
Net bank debt (143,609) (149,947) (178,045)
Net debt
30 June 31 December 30 June
2024 2023 2023
€'000 €'000 €'000
Net bank debt APMs (143,609) (149,947) (178,045)
Current lease obligations Balance Sheet (20,051) (20,134) (15,364)
Non-current lease obligations Balance Sheet (158,394) (126,083) (123,487)
Net debt (322,054) (296,164) (316,896)
Leverage
30 June 31 December 30 June
2024 2023 2023
€'000 €'000 €'000
Net bank debt APMs (143,609) (149,947) (178,045)
Rolling 12 months adjusted EBITDA 96,171 94,862 92,988
Leverage (times) 1.5 1.6 1.9
Adjusted operating profit
30 June 30 June
2024 2023
€'000 €'000
Operating profit Income Statement 32,226 28,006
Amortisation of acquisition related intangibles Note 8 1,706 1,636
Exceptional charge recognised in operating profit Note 3 4,221 6,063
Adjusted operating profit 38,153 35,705
Adjusted earnings per share
Six months ended Six months ended
30 June 30 June
2024 2023
€'000 €'000
Adjusted earnings per share has been calculated by reference to the following:
Profit for the financial period attributable to owners 15,371 15,012
Exceptional charge recognised in operating profit (note 3) 4,221 6,063
Exceptional credit recognised in finance costs (note 3) - (1,654)
Exceptional credit recognised in income tax (note 3) (357) (615)
Tax credit on acquisition related intangibles (190) (174)
Amortisation of acquisition related intangibles (note 8) 1,706 1,636
Share-based payments expense 1,472 1,485
Profit after tax excluding exceptional items 22,223 21,753
Weighted average number of shares in issue in the period (000's) 273,015 272,815
Adjusted basic and diluted earnings per ordinary share (in cent) 8.1 8.0
Like for like weighted average number of shares (000's) 273,015 273,015
Like for like adjusted earnings per ordinary share (in cent) 8.1 8.0
Free cash flow conversion
Six months ended Six months ended
30 June Year ended 30 June
2024 31 December 2023
2023
€'000 €'000 €'000
EBITDA APMs 55,901 115,985 52,611
Increase in inventories Note 15 (13,415) (16,868) (8,114)
Increase in receivables Note 15 (49,456) (67,073) (44,298)
Increase in payables Note 15 93,951 67,717 15,357
Foreign currency translation adjustments Note 15 (358) 172 359
Payments to acquire property, plant and equipment - maintenance Cash Flow (4,320) (7,192) (2,426)
Payments to acquire intangible assets - maintenance Cash Flow (2,368) (3,771) (1,209)
Settlement of acquired financial liabilities* 450 2,068 938
Free cash flow 80,385 91,038 13,218
EBITDA 55,901 115,985 52,611
Free cash flow conversion 143.8% 78.5% 25.1%
*The adjustment to free cash flow ensures that payments made after an
acquisition to settle loans with former shareholders of acquired companies, or
other similar financial liabilities, are excluded from the movement in
payables in the free cash flow conversion calculation.
Return on capital employed
30 June 30 June 30 June
2024 2023 2022
€'000 €'000 €'000
Rolling 12 months operating profit 71,928 56,084 46,616
Adjustment for 12 months exceptional costs 8,205 16,694 15,508
Acquisition related 12 months intangible amortisation 3,411 2,921 2,813
Adjusted 12 months rolling operating profit 83,544 75,699 64,937
Total equity 350,187 304,146 263,569
Net bank debt 143,609 178,045 73,807
Deferred contingent consideration 68,489 85,987 89,971
Deferred consideration payable - 100 3,977
Total capital employed 562,285 568,278 431,324
Average capital employed 565,282 499,801
Adjustment for acquisitions (note A / B below) 1,158 14,258
Adjusted average capital employed 566,440 514,059
Return on capital employed 14.7% 14.7%
Note A: Adjustment for acquisitions (2024) Capital Completion Adjustment
employed Date
€'000 €'000
Acquisitions completed during 2023 6,375 Various 1,158
Adjustment for acquisitions 1,158
Note B: Adjustment for acquisitions (2023) Capital Completion Adjustment
employed Date
€'000 €'000
McCauley Pharmacy Group 49,407 Feb-23 (4,117)
BModesto Group 41,901 Nov-22 6,984
Other acquisitions completed during 2022 and 2023 33,532 Various 11,391
Adjustment for acquisitions 14,258
The adjustment ensures that the capital employed of acquisitions completed
during the period are appropriately time apportioned to align with the
corresponding periods for adjusted operating profit. The adjustment includes
cash consideration, deferred and deferred contingent consideration, debt
acquired, cash acquired, and any cash impact of shareholder loans or other
similar financial liabilities repaid post-acquisition.
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