UDG Healthcare PLC (LON:UDG) shares moved higher on Tuesday as the FTSE 250 firm forecast profit growth for its current year after what it said was a “good start” in its first quarter.
In a trading update for the period to December 31 from October 1, the company said its adjusted operating profit for the quarter is “ahead of the same quarter last year” as it highlighted a better year-on-year performance for its Ashfield and Sharp businesses.
The company also said that in January Ashfield had completed its acquisition of PHMR Limited, a market access consultancy, for £32mln comprised of an initial consideration of £22mln and an earn-out of up to £10mln payable over two years based on agreed profit targets.
Looking ahead, UDG said it expects operating profits for the year to September 30, 2021, to be 11-13% higher than the US$165.3mln reported in 2020, adding that its strong balance sheet will allow it to make “further strategic acquisitions as those opportunities arise”, which it said will complement its continued underlying profit growth.
In a note on Tuesday, UDG’s house broker Liberum reiterated its ‘buy’ rating and 900p target on the stock, saying the update was “very positive” and they expected the company to “outperform in 2021”.
The company’s shares rose 3.9% to 811p in early trading.