Overview
UDG Healthcare Plc (UDG) was incorporated in the year 1948 and is headquartered in Dublin, the Republic of Ireland. The company provides clinical, communication, packaging, advisory, and commercial services in the United Kingdom, North America, the Republic of Ireland, and internationally. The company has two business operations being Ashfield and Sharp. The company owns and manages (approximately) 8,700 people in 26 countries. The company is also involved in the healthcare advisory, manufacturing and technology services.

Key Statistics

Financial Results and Review - FY2018 ($, thousand)

(Source: Annual Report, Company Website)

In the Financial year 2018, UDG Healthcare Plc’s reportedrevenue was $1,315,186 thousand for the year ending September 2018 as compared to $1,219,755 thousand in 2017 for the same period. There was an increase of 7.8 per cent in revenue of the company due to the increase in Ashfield and Sharp revenue segment by 12% and 3% respectively. The gross profit for the company stood at $381,603 thousand in FY 2018 as compared to $347,846 thousand in FY 2017.The operating profit stood at $5,501 thousand in FY 2018 as compared to $103,186 thousand in FY 2017.There was a significant decrease of $97,685 thousand due to an increase in selling and distribution expenses and other operating expenses in the current financial year. The company’s reported profit before tax stood at $8,386 thousand in FY 2018 as compared to $92,834 thousand in FY 2017.The company’s reported Finance expenses had also decreased significantly in comparison with the last year. The company’s profit attributable to shareholders was $3,795 thousand in FY2018 as compared to $71,858 thousand in FY2017. The Basic earnings per share stood at 1.53 cents in FY 2018 as compared to 28.97 cents in FY 2017. The Diluted earnings per share stood at 1.52 cents in FY 2018 as compared to 28.83 cents in FY 2017.
 
Share Price Performance

 
Daily Chart as at April-01-19, before the market close(Source: Thomson Reuters)
 
On 1st April 2019, at the time of writing (before market close, GMT 4:22 PM), UDG Healthcare Plc shares were trading at GBX 560.50, down by 0.97 per cent against its previous day closing price. Stock's 52 weeks High and Low is GBX 950.50/GBX 544.85. The outstanding market capitalisation was around £1.41 billion and a dividend yield of 2.20 per cent.
 
Valuation Methodology 


Conclusion
The companies had shown significant growth in top-line performance in the current financial year. The company has increased its capabilities and global scale drive to increase productivity and efficiency across businesses and facilities. The company is more focused on expanding its operations through a combination of organic growth and strategic acquisitions. The company had a strong track record of acquisitions, which have strengthened its market positions and generated solid returns. The company current debt levels are low, and they have a good flow of potential acquisition opportunities for its divisions which would help them to add scale and further broaden their range of services. Based on the strong growth prospects of the company and the valuation done using the above method, we have given a BUY recommendation at the closing price of GBX 566.00 (as on 29th March 2019) with single-digit upside potential based on 9x NTM EV/EBITDA (approx.) on FY19E EBITDA.
 
*All forecasted figures and peers have been taken from Thomson Reuters. Currency exchange rate taken for 1 USD = 0.7674 GBP
*The buy recommendation is also valid for the current price as covered in the report (as on April-01-19).

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