2022 Interim Results

RNS Number : 4702X

Uniphar PLC

30 August 2022

 

 

Uniphar plc

2022 Interim Results

Uniphar plc, an international diversified healthcare services business announces its half year results for the six months ended 30 June 2022, performing in line with expectations and delivering EBITDA growth of 9.2% and Adjusted EPS growth of 18.3%.

FINANCIAL HIGHLIGHTS

			Growth
Six months ended 30 June1	2022 €'000	2021 €'000	Reported	Constant currency2
Revenue	991,831	964,867	2.8%	2.4%
Gross profit	146,135	134,290	8.8%	7.6%
Commercial & Clinical	58,541	53,446	9.5%	7.9%
Product Access	21,818	20,051	8.8%	5.4%
Supply Chain & Retail	65,776	60,793	8.2%	8.2%
Gross profit margin (Group) %	14.7%	13.9%
EBITDA1	44,935	41,138	9.2%	8.1%
Operating profit	25,078	23,609	6.2%	5.2%
Profit before tax excluding exceptional items	26,125	23,766	9.9%	8.8%
Net bank debt1	(73,807)	(30,341)
Basic EPS (cent)	5.9	5.7
Adjusted EPS (cent)1	8.4	7.1

· Gross profit growth of 8.8% (4.9% organic³); growth across all divisions with Supply Chain & Retail once again outperforming medium term guidance, delivering 5.2% organic growth³.

· Continued growth in gross profit margin from 13.9% to 14.7%, reflecting ongoing focus on margin development in a challenging inflationary environment.

· EBITDA growth of 9.2%, from €41.1m to €44.9m, demonstrating the resilience of the business despite continued macroeconomic uncertainty and inflationary pressures.

· 18.3% adjusted EPS growth to 8.4 cent (June 2021: 7.1 cent).

· The Group continued to execute its growth strategy with the acquisition post period end of Orspec Pharma Pty Ltd. ("Orspec") which provides entry into the strategically important Asia Pacific (APAC) region.

· Robust liquidity with net bank debt of €73.8m at 30 June 2022 (December 2021: €48.3m), leverage remaining low and free cash flow conversion of 47.5% which reflects the unwind of December 2021 working capital positions. Excluding the impact of the working capital movements, free cash flow conversion is within our target range (60-70%).

· The Board have declared an interim dividend of €1.7m (€0.0061 per ordinary share) for the period up to 30 June 2022.

1.  Additional information in relation to Alternative Performance Measures (APMs) are set out below.

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.

STRATEGIC AND OPERATIONAL HIGHLIGHTS

· Strong performance in the period leveraging the Group's scale and leading market positions to mitigate inflationary headwinds.

· Organic gross profit growth of 4.9% driven by growth across all divisions, with an outperformance in Supply Chain & Retail delivering 5.2%, Commercial & Clinical delivering 4.2% and Product Access delivering 5.7%.

· New five-year banking facility completed post period end which more than doubles the revolving credit facility (RCF) to €400m with an additional uncommitted accordion facility of €150m. Three international banks, Barclays Bank, ING Bank and Citizens Bank joined the existing syndicate increasing the syndicate to seven banks. This new facility provides the platform to accelerate our ambitious growth strategy and acquisition pipeline.

· Robust cash flow performance with reported free cash flow conversion of 47.5%. When adjusted for the impact of the planned unwind of temporary timing benefits, free cash flow conversion is within our target range of 60-70%.

· The Commercial & Clinical division delivered gross profit growth of 9.5% off a very strong comparative period in 2021 where growth of 27.5% was recorded. The diversity of the MedTech portfolio ensured continued growth in the period, while investment in our digital platforms and omni-channel offerings supported our customers in the industry-shift towards a hybrid model of both digital and in-person HCP (Healthcare Professional) engagement.

· Product Access has recently signed its first US Expanded Access Program (EAP) representing a significant milestone in the continued geographic growth of the division. The division continues to target double-digit organic growth in gross profit over the medium term.

· The Supply Chain & Retail division has commenced a strategic investment programme in an Irish-based distribution facility. This multi-year organic investment in a state-of-the-art facility will unlock further operational efficiencies and provide the infrastructure to meet growing market demands by doubling capacity levels and enhancing the division's market leading service offering.

· Post period end, the Group completed the acquisition of Orspec marking our entry into the strategically important APAC market. Orspec, an Australian-headquartered company with additional hubs in Singapore and New Zealand, specialises in the supply of unlicensed medicines and the delivery of Expanded Access Programs across APAC. This acquisition represents our first entrance into the APAC region and further advances our divisional strategy of being a global leader in Product Access services.

· Integration of 2021 acquisitions including CoRRect Medical, BESTMSLs Group, E4H and Devonshire Healthcare Services are progressing well and delivering expected benefits. The acquisition of the Navi Group is subject to approval by the Competition and Consumer Protection Commission (CCPC) and is expected to close later this year.

· Sustainability and governance remain key objectives for the Group and progress was made across all five sustainability pillars. The Group has completed the assessment of its Scope 3 carbon footprint globally and this is included in our 2022 CDP submission.

Ger Rabbette, Uniphar Group Chief Executive Officer said:

"The Group has performed strongly during the period delivering Adjusted Earnings per Share growth of 18%. Each division has delivered organic gross profit growth, underpinned by a strong team performance across the board, with an outperformance in Supply Chain & Retail. The Group has leveraged its scale and diverse service offering to help mitigate inflationary pressures which continue to be a challenge across the globe.

Additionally, we have completed the acquisition of Orspec Pharma, marking our entry into the strategically important Asia-Pacific region. Orspec, headquartered in Australia, will support our goal of becoming a global leader in Product Access services through the provision of Expanded Access Programs and the delivery of unlicensed medicines.

We remain confident and are on track to achieve our strategic objective of doubling 2018 pro-forma EBITDA within five years of IPO"

Analyst presentation

A conference call for investors and analysts will be held at 9am (BST), today, 30 August 2022. To register for the call please visit www.uniphar.ie.

A copy of the presentation and announcement will be available on our website at the time of the call.

Contact details

Uniphar Group	Tel: [phone]
Seamus Egan
Head of Corporate Development and Investor Relations	[e-mail]
Davy	Tel: [phone]
(Joint Corporate Broker, Nominated Adviser and Euronext Growth Adviser)
Barry Murphy
Niall Gilchrist Lauren O'Sullivan
RBC Capital Markets (Joint Corporate Broker)	Tel: [phone]
Jonathan Hardy
Jamil Miah
Stifel Nicolaus Europe Limited (Joint Corporate Broker)	Tel: [phone]
Matt Blawat
Ben Maddison
Francis North
Q4 PR (Public Relations Adviser to Uniphar)	Tel: [phone]
Iarla Mongey	or [phone]

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, the Uniphar Group is an international diversified healthcare services business servicing the requirements of more than 200 multinational pharmaceutical and medical technology manufacturers across three divisions - Commercial & Clinical, Product Access and Supply Chain & Retail. The Group is active in Ireland, the UK, Europe, the US and Australia.

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.

Commercial & Clinical

In Commercial & Clinical, the Group provides outsourced sales, marketing & distribution solutions to multinational pharmaceutical and medical device manufacturers. Active in Ireland, the UK, Benelux, the Nordics, Germany and the US, the Group is growing with its clients to provide pan-European solutions, with a targeted service offering in the US. Uniphar has built fully integrated digitally enabled customer centric solutions that are supported by our highly experienced and clinically trained teams, leveraging our digital technology and insights which allows us to deliver consistently exceptional outcomes for our clients.

Product Access

In Product Access, the Group is growing two distinct service offerings: 1) "On Demand", which are pharmacy led solutions for sourcing and supplying unlicensed medicines to meet the needs of both retail and hospital pharmacists; and 2) "Exclusive Access", which are manufacturer led solutions for controlling the release of speciality medicines for specifically approved patient populations in agreed markets. The Group currently delivers product access solutions on a global basis.

Supply Chain & Retail

Uniphar is an established market leader in Ireland with c. 53% market share in the wholesale/hospital market, supported by a network of 381 owned, franchised and symbol group pharmacies. The business supports the diverse customer base through the provision of strong service levels coupled with innovative commercial initiatives. Supply Chain & Retail is an Irish only business for the Group, although the manufacturer relationships and infrastructure are also utilised for the benefit of the Commercial & Clinical and Product Access divisions.

Overview

Uniphar delivered a strong performance during the first six months of 2022 leveraging its scalable platforms to help mitigate the impact of inflationary pressures and global economic uncertainty. Gross profit growth of 8.8% was driven by organic growth of 4.9% with a particularly strong performance in the Supply Chain & Retail division combined with the benefit of acquisitions completed in 2021. We continue to deliver on our growth strategy, which remains unchanged, of building out our pan-European and global platforms for Commercial & Clinical and Product Access respectively, through acquisition and organic growth, while at the same time investing in both infrastructure and earnings accretive acquisition opportunities in our market leading Supply Chain & Retail division.

Adjusted EPS increased from 7.1 cent to 8.4 cent delivering 18.3% growth. EBITDA has increased by 9.2% (€3.8m) to €44.9m (June 2021: €41.1m) benefitting from the impact of 2021 acquisitions and strong organic gross profit growth across all divisions. EBITDA margin at 4.5% has remained consistent with 2021 levels (June 2021: 4.3%) with growth in gross margin being offset by inflationary challenges and continued investment in our teams and infrastructure.

Return on capital employed (ROCE) for the rolling 12-month period closed at 16.6% (December 2021: 17.6%) performing ahead of the Group's medium term target (12-15%) and reflecting both the increase in operating profit in the period and strong performance from our 2021 acquisitions. The investments made during 2021, both from a capital and acquisitions perspective, will deliver further benefits and growth in the coming years.

The Group continues to maintain its solid financial position, with a robust Balance Sheet, and strong liquidity which is driven by continued focus on working capital management. Net bank debt was €73.8m (December 2021: €48.3m) with low leverage providing a solid platform to support future growth and investment.

A new five-year banking facility (with two one-year extension options) was signed in August 2022. The new facility more than doubles the Group's available facilities with a revolving credit facility of €400m and a €150m uncommitted accordion facility. The banking syndicate has increased to seven banks with the addition of three new international banking partners, Barclays Bank, ING Bank and Citizens Bank joining the existing banking syndicate. The new facility and enlarged banking syndicate provides the platform to accelerate our ambitious growth strategy and acquisition pipeline.

The Group remains focused on delivering on its strategy in the Commercial & Clinical division where we are focused on building a pan-European offering, with a targeted service offering in the US, while in the Product Access division we are targeting a global offering in providing a market leading service in the delivery of Expanded Access Programs. Both enhance our ability to develop new client relationships and achieve growth. In Supply Chain & Retail, our management team have a track record of outperforming the market. We will continue to leverage this valuable experience combined with our digital technologies, hi-tech infrastructure and long-standing manufacturer relationships to grow this division.

Sustainability

Sustainability continues to be a key focus for the Group with progress across all five sustainability pillars in the first half of 2022. Equity, Diversity and Inclusion has been a key focus during 2022 with the launch of our Unity@Uniphar initiative and two employee resource groups - our Women's Alliance and Rainbow Alliance.

On the environmental front, in line with our commitment to setting a science-based carbon reduction target, we completed our first Scope 3 footprint in respect of our global business with the emissions data collected included in our 2022 CDP submission. Having completed a global footprinting data exercise across Scopes 1, 2 and 3, the Group's focus is now on finalising our science-based targets and establishing a decarbonisation strategy to meet our target of 50% reduction in carbon emissions by 2030 from a baseline of 2019.

Following the outbreak of the war in Ukraine, the Group launched the Unity for Ukraine Initiative to provide much needed healthcare supplies and funds to Ukraine. We are incredibly proud that with the dedication of Uniphar's teams, customers and suppliers we saw much needed medical product donated to support humanitarian efforts in Ukraine.

From a corporate governance perspective, in line with commitments made at the time of the Group's IPO, in early 2022 the Board adopted the UK Corporate Governance Code as the corporate governance code of the Group.

Current trading

In the first half of the year, Uniphar performed in line with expectations at a group level, leveraging the scale of our platforms and the diversity of our service offering to help mitigate unprecedented inflation in all markets. Since the period end, the Group has continued to perform in line with expectation notwithstanding continued cost inflationary challenges which the management team are focused on mitigating.

The Group is in a strong position to continue to invest in growth opportunities. Net bank debt was €73.8m (December 2021: €48.3m) at period end and low leverage together with the new banking facility and enlarged banking syndicate provide a solid platform to support future growth and investment as opportunities arise.

The Group continues to deliver on the strategy and growth committed to at IPO and is confident that it will continue to deliver long-term value for our shareholders. Acquisitions, combined with strategic capital expenditure, continue to play an important part in Uniphar's growth strategy, and the Group's Balance Sheet is well placed to support our objectives.

Outlook

Uniphar is well positioned to drive gross profit growth across all divisions and is confident of delivering on current trading expectations for the full year. Cost inflation continues to be a concern and will remain a key focus for management through the remainder of 2022 and into 2023. The business has substantially mitigated the cost pressures experienced to date but given the unprecedented levels of inflation being experienced in certain markets, the Group remains focused on maintaining margins through the current inflationary cycle.

While the Group expects Product Access to deliver mid-single digit organic growth in 2022, the medium term guidance remains unchanged:

· Commercial & Clinical: Mid-single digit

· Product Access: Double-digit

· Supply Chain & Retail: Low-single digit

M&A will continue to play an important role in Uniphar's growth strategy, and we will continue to have a disciplined approach to capital allocation. The Group has an active pipeline of acquisition opportunities to add further scale and breadth to the existing platform.

We are pleased with the progress we have made since IPO towards delivering our target of doubling 2018 pro-forma EBITDA within five years. We are confident we have built the team and platform which, combined with a compelling market opportunity, will enable us to deliver this objective.

Acquisitions and integration update

Post period end, the Group completed the acquisition of Orspec marking our entry into the strategically important APAC markets. Integration of the four acquisitions completed in 2021 is progressing in line with expectations. The acquisition of Navi Group is, as previously disclosed, subject to approval by the CCPC and the Group expects the acquisition to close later this year.

Commercial & Clinical

Integration update

The integration of the 2021 acquisitions of CoRRect Medical, BESTMSLs Group and E4H are progressing well into the Commercial & Clinical division, and all have enhanced the division's ability to build connectivity between its clients and key healthcare stakeholders with its best-in-class digital capabilities. CoRRect Medical has enabled the provision of a fully integrated offering across the important German and Swiss MedTech markets. BESTMSLs Group expands the Group's US presence by providing outsourced medical affairs services including the provision of contract MSL (Medical Science Liaison) teams, recruiting, training, education, and a range of innovative digital solutions for its pharma partners. E4H enhances Uniphar's value proposition by creating a truly differentiated omni-channel offering for pharmaceutical clients looking to commercialise their brands across Europe.

Product Access

Acquisition update

Orspec is an Australian-headquartered company which specialises in the sourcing and procurement of pharmaceutical products for supply on a named patient basis across the Asia Pacific Region. This acquisition represents our first entrance into the APAC region and helps advance our divisional strategy of being a global leader in Product Access services.

Integration update

The integration of the 2021 acquisition of Devonshire Healthcare Services into our Product Access division is progressing well. Devonshire enables Uniphar to expand its global access into key hospitals in the Middle East and North Africa (MENA) region, for the benefit of both its On Demand and Exclusive Access businesses. Devonshire is benefitting from Uniphar's existing operational infrastructure and driving cross-selling opportunities.

Supply Chain & Retail

Acquisition update

In December 2021, the Group announced the acquisition of the Navi Group. The acquisition remains subject to CCPC approval. On completion of this acquisition, the unique technology and value proposition of the Navi Group combined with Uniphar's scalable hi-tech distribution facilities and digital platforms, should deliver an even stronger offering to our independent community pharmacy customer base.

Strategic capital expenditure

The Supply Chain & Retail division has commenced a multi-year strategic investment programme in an Irish-based distribution facility. The Group recognises the strategic need to invest to meet the growing demands of the market and to continue to grow market share. Once completed the facility will incorporate the latest technologies to enable the business to drive operational efficiencies and provide the infrastructure to double current capacity levels. This will further strengthen our already strong position in the Irish market and provide the platform for further growth. The project will take four years to complete, after which it will start to deliver the expected transformational benefits.

Principal Risks & 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 2021 Annual Report on pages 27 to 31. A copy of the Annual Report can be downloaded from our website www.uniphar.ie.

2022 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 2022, 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 & geopolitical risk with regards to the ongoing war in Ukraine and global economic instability.

The key principal risks and uncertainties faced by the Group are summarised as follows:

Strategic Risks

· Brexit - The post-Brexit environment poses several risks for the Group due to uncertainty and complexities as to the future fiscal and regulatory landscape in the UK. The Group has traded through the initial Brexit uncertainty with Brexit plans in operation and this risk has decreased year-on-year. The Group recognises the potential risk surrounding the agreement of the Northern Ireland Protocol. Overall, this may have a negative impact on EU-UK trade. Brexit also has the potential to create market uncertainty and currency fluctuations which could impact the translation of our UK operations into the Group reporting currency.

· Acquisitions - Growth through acquisitions continues to remain a key strategy for the Group. Failure to identify, complete and integrate acquisitions successfully may directly impact the Group's projected growth.

· Economic & 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. The Group continues to monitor the ongoing war in Ukraine, and the knock-on effects of this on inflation and the cost base.

· Key personnel & succession planning - Failure to attract, retain and develop the skills and expertise of its people may adversely impact the Group's performance.

· 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.

Operational Risks

· Pandemic Risk - Covid-19 and its implications continue to evolve and change. Business disruption arising from further waves and variants of the Covid-19 virus, or other future pandemics may result in but is not limited to the following: supply chain disruption, postponement of certain elective surgeries, curtailment of travel and impact on staff.

· IT systems - Digital capabilities are a specific strategic offering of Uniphar, interruption or downtime may have a negative impact on the Group's operations, financial, and competitive positions.

· 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.

· 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, together with the Group operating in jurisdictions outside of the Eurozone.

· Treasury - The Group is exposed to liquidity, interest rate and credit risks. The Group may be exposed to increased interest rate and credit risks from any changes to economic conditions.

Operational overview

Commercial & Clinical

				Growth
Six months ended 30 June	2022 €'000	2021 €'000		Reported	Constant currency
Revenue	162,322	157,816		2.9%	1.3%
Gross profit	58,541	53,446		9.5%	7.9%
Gross profit margin %	36.1%	33.9%		220bps

Overview

Commercial & Clinical provides outsourced sales, marketing and distribution solutions to pharmaceutical and medical device manufacturers on a pan-European basis with a targeted service offering in the US. The division is focused on the commercialisation of speciality products for our manufacturer clients. With an ability to serve 15 countries, we are able to deliver flexible commercial solutions across multiple markets for our key customers . The recent acquisitions of Diligent Health Solutions and BESTMSLs Group in the US, together with E4H in the UK, have further enhanced our service offering by broadening our range of services, with the acquisition of CoRRect Medical enhancing our pan-European MedTech offering and strengthening our interventional portfolio.

H1 2022 Performance

Commercial & Clinical delivered another very strong performance in H1 2022, with organic gross profit growth of 4.2% off a very strong comparative period in 2021, reinforcing our role as a trusted partner to our clients and customers across Europe and the US. The expertise and agility of our teams, our speciality focus, the diversity of our product portfolio and our multi-channel enabled sales teams ensured the business achieved a robust performance in a challenging environment. Commercial & Clinical represents 40% of the Group's gross profit in the first half of 2022.

Key highlights from the six-month period include:

· Revenue growth of 2.9% achieved across the division, against a strong comparative period.

· Gross profit generated from outside Ireland represents 60% of the divisional gross profit.

· Increase in number of manufacturers represented in more than one geography to 75 (June 2021: 59).

· Integration of the acquisitions of BESTMSLs Group, CoRRect Medical and E4H is progressing well.

MedTech

Our Commercial & Clinical MedTech offering provides a fully integrated solution for our clients in sales, marketing and distribution of medical devices across interventional cardiology/radiology, orthopaedics, ophthalmology, minimally invasive surgery, diagnostic imaging and critical care.

The diversity of our MedTech portfolio enabled continued strong organic growth during the Covid-19 pandemic. With the effects of the pandemic now subsiding, our interventional and orthopaedic specialities in particular have helped fuel incremental growth in H1 2022 against a strong comparative period. We have leveraged our speciality expertise to enhance our technology offering by expanding into the surgical robotics space and we see significant growth opportunities in this area in future years. In addition, we have successfully continued to leverage our existing manufacturer relationships to fuel our geographical growth, with the number of manufacturers represented in more than one geography increasing to 75 across Commercial & Clinical.

Our continued focus in expanding our geographic and client base means we are now active in 15 markets. The acquisition of CoRRect Medical in July 2021, with a significant presence in Germany and Switzerland, enhances our pan-European offering and the integration of this business into the wider MedTech business is progressing well.

Pharma

Our Pharma business unit focusses on providing insight-driven, digitally enabled customer centric solutions for pharmaceutical manufacturers. This allows Uniphar to engage with healthcare professionals (HCPs) with targeted information by utilising the channel that is most convenient for them, resulting in better outcomes for both HCPs and pharmaceutical companies. Following the acquisition of BESTMSLs Group, their digital platform, The Doctors Channel, further enhances our engagement capabilities, delivering expert medical information condensed into short streaming videos.

The Covid-19 pandemic forced a rapid rethink in the sales and marketing strategies of pharma companies with a shift away from traditional in-person engagement to a significantly increased demand for digital engagement offerings. Uniphar was able to drive growth through this transition by supporting our customers with our digital propositions and omni-channel offering. As the industry re-emerges from the pandemic it is clear that, while there is a return of in-person engagement, there has been a marked shift and that the future is a hybrid model of digital and in-person engagement which Uniphar's omni-channel offering is well positioned to deliver. Our recent acquisition of E4H builds on our capabilities to further support our customer proposition and create a truly differentiated omni-channel offering in the industry.

The acquisitions of Diligent Health Solutions (H2 2020), and BESTMSLs Group (H2 2021) have extended our presence into the strategically important US market, and significantly enhances the capabilities of the Pharma business unit. While Diligent and BESTMSLs are US-based, our focus is to continue to enable these service offerings across our Commercial & Clinical and Product Access targeted geographies.

Product Access

			Growth
Six months ended 30 June	2022 €'000	2021 €'000	Reported	Constant currency
Revenue	74,474	85,954	(13.4%)	(15.2%)
Gross profit	21,818	20,051	8.8%	5.4%
Gross profit margin %	29.3%	23.3%	600bps

Overview

Uniphar's Product Access division works to provide equitable access to medicines for patients on a worldwide basis. Partnering with manufacturers, we provide the global reach and world class execution required to help them to ensure patients can get access to their early stage, hi-tech or otherwise difficult to source medicines. Our digital and regulatory capabilities complimented by our expert multilingual teams enable us to offer a high standard of service quality and implementation.  Product Access represents 15% of the Group's gross profit in the first half of 2022.

H1 2022 Performance

Following an exceptionally strong 2021, Product Access reported positive gross profit growth of 8.8% to €21.8m in the first six months of 2022. The reduction in revenue during the period is reflective of a significant EAP contract moving to the commercialisation stage of its development lifecycle. 

Key highlights from the period include:

· Gross margin % improvement to 29.3% with focus on higher margin opportunities.

· 56% of the division's gross profit is generated outside of Ireland.

· Strong gross profit growth of 8.8% off the back of an exceptionally strong 2021 performance.

· The integration of Devonshire Healthcare Services, which was acquired in Q4 2021, is proceeding in accordance with plan and opening up opportunities in the MENA region.

Exclusive Access

Expanded Access Programmes (EAPs) allow pharmaceutical companies to provide medicines to patients when a product has not yet been licensed in a jurisdiction, or has been licensed, but is not yet eligible for reimbursement by the relevant authority. During the period, the business has secured four additional global programmes across several new clients.

Patient centricity is at the heart of everything we do and our bespoke digital platform developed by our team at Innerstrength, enhanced with the regulatory knowledge and skillset of the team at RRD, enables exceptional execution across all geographies. 

The division recently signed its first EAP in the US which has been a key strategic objective of the business. This represents a significant milestone in becoming a global leader in this space.

On Demand

Uniphar is well positioned as a major supplier of unlicensed medicines to specialist importers around the globe. While Pharmasource, our Irish based On Demand business, continues to deliver record performance achieving double digit growth in a mature market and our focus on expanding our market share across the UK continues, we are also targeting non-EU markets, particularly through our Q4 2021 acquisition of Devonshire Health Services. 

During the period, the Devonshire business migrated to our Durbin UK Heathrow facility to realise the commercial and operational scale identified at the time of acquisition. The integration of Devonshire is progressing well with a continued focus on identifying additional opportunities across the MENA region to provide solutions to customers' sourcing challenges. 

Acquisition

Post period end, the Group completed the acquisition of Orspec, marking our entry into the strategically important APAC market. Orspec, an Australian-headquartered company with hubs in Singapore and New Zealand, specialises in the supply of unlicensed medicines and the delivery of Expanded Access Programs across APAC. Orspec brings a strong management team to the Group with region-specific expertise. This acquisition represents our first entrance into the APAC region and further advances our divisional strategy of being a global leader in Product Access services.

Supply Chain & Retail

			Growth
Six months ended 30 June	2022 €'000	2021 €'000	Reported	Constant currency
Revenue	755,035	721,097	4.7%	4.7%
Gross profit	65,776	60,793	8.2%	8.2%
Gross profit margin %	8.7%	8.4%	30bps

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 381 owned, franchised or supported pharmacies. Uniphar holds c.53% of the current market share and is an essential part of the national health infrastructure in Ireland.

H1 2022 performance

· 8.2% growth in gross profit of which 5.2% is organic growth.

· Six independent community pharmacies acquired in H1 2022.

· Continued growth of our consumer product offering supported by the addition of the Dr Hauschka brand of natural skincare products in the period.

· Digital innovation and transformation supporting our retail pharmacy partners.

Wholesale

The wholesale business performed strongly in the period with robust underlying volumes across all key categories. Growth was achieved through a combination of market recovery compared to 2021 coming out of the Covid-19 pandemic aided by a surge in Covid-19 related sales in the early part of 2022. Prescription and OTC (Over The Counter) products continue to be at the core of what we provide to our community pharmacy customers.

Pre-wholesale

The pre-wholesale business continued to experience growth in the period despite macroeconomic headwinds. The continued investment in our infrastructure to ensure operational excellence for our customers has ensured several successful contract renewals in the period.

The new four-year IPHA (Irish Pharmaceutical Healthcare Association) agreement came into effect in 2022, bringing with it market changes across our client manufacturer portfolios due to the growing penetration of biosimilar products. The new agreement gives pricing stability for the next four years, positioning the pre-wholesale business strongly moving forward.

Retail

The business supports a network of 381 pharmacies either owned or franchised through the Uniphar symbol group. Symbol group members are offered a range of both front and back-office support, in addition to a dedicated team on the ground to enable community pharmacies to better compete with the larger and multi-national owned chains. The business acquired six independent community pharmacies in the period which are being integrated into the division as planned.

Retail pharmacies have performed well in the period recovering from the Covid-19 pandemic which was a factor in the comparative period in 2021. Mitigating the inflationary headwinds was a focus for the period and will continue to be managed closely for the remainder of the year.

Online/Digital

We have brought our pharmacy customers on a journey with us in recent years in digitising and automating processes for our pharmacy teams. During the period, we launched the Hickey's B2C ecommerce platform and made further strides in digital innovation in our supported pharmacies. Our symbol groups now offer online doctor services, customer phone apps and online shopping.

Acquisitions

The acquisition of Navi Group is, as previously disclosed, subject to approval by the CCPC and the Group expects the acquisition to close later this year. This strategic acquisition brings market share in the form of additional pharmacy customers, an innovative and experienced trading team and importantly a number of innovative proprietary digital solutions for retail pharmacies. This will accelerate our ability to support our customers to achieve a fully connected pharmacy.

Strategic capital expenditure

The Supply Chain & Retail division has commenced a strategic investment programme in an Irish-based distribution facility. This multi-year organic investment in a state-of-the-art facility will unlock further operational efficiencies and provide the infrastructure to meet growing market demands by doubling capacity levels and enhancing the division's market leading service offering.

Financial Review

Summary financial performance

			Growth
Six months ended 30 June	2022 €'000	2021 €'000	Reported	Constant currency
IFRS measures
Revenue	991,831	964,867	2.8%	2.4%
Gross profit	146,135	134,290	8.8%	7.6%
Operating profit	25,078	23,609	6.2%	5.2%
Basic EPS (cent)	5.9	5.7
Alternative performance measures
Gross profit margin	14.7%	13.9%
EBITDA	44,935	41,138	9.2%	8.1%
Adjusted EPS (cent)	8.4	7.1
Net bank debt	(73,807)	(30,341)
Return on capital employed	16.6%	17.6%

Revenue

Revenue increased by 2.8%, which was achieved through a combination of organic growth, driven by a strong performance in the Supply Chain & Retail and Commercial & Clinical divisions together with the impact of the 2021 acquisitions.

Gross profit

Gross profit has increased by 8.8% due to a particularly strong performance in the Supply Chain & Retail division combined with the impact of the 2021 acquisitions for the first six months. The Gross profit margin has increased from 13.9% to 14.7% reflecting the continued expansion of the Group into higher margin businesses and sectors.

Divisional gross profit

							Growth
Six months ended 30 June		2022 €'000	2021 €'000		Reported			Constant  Currency
Commercial & Clinical		58,541	53,446		9.5%			7.9%
Product Access		21,818	20,051		8.8%			5.4%
Supply Chain & Retail		65,776	60,793		8.2%			8.2%
		146,135	134,290

EBITDA

EBITDA has increased by €3.8m (9.2%) to €44.9m. The main drivers for this are the growth in revenue, particularly of higher margin businesses, coupled with the impact of the 2021 acquisitions. Overheads have increased to reflect the business investment for future growth, combined with some inflationary pressures on cost.

Exceptional items

Exceptional costs amounted to €5.5m for the period and primarily relate to restructuring costs (€2.7m), professional fees associated with acquisitions (€2.0m) and acquisition integration costs (€1.1m) offset by an associated exceptional tax credit. Further details are provided in note 3.

Earnings per share

Basic earnings per share increased from 5.7 cent to 5.9 cent. The increase in earnings has been partially offset by an increase in the weighted average number of shares from 267,137,000 to 272,297,000. The weighted average number of ordinary shares 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 7.1 cent to 8.4 cent reflecting the strong performance in the business. Growth in adjusted earnings per share is partially offset by an increase in the weighted average number of shares in issue during the period.

On a like for like basis, adjusted earnings per share increased from 7.0 cent to 8.4 cent by applying the weighted average number of shares as at June 2022 to both periods, to provide a more meaningful comparison.

Cash flow and net bank debt

The free cash flow conversion in the six months to 30 June 2022 was 47.5% (2021: 69.6%) reflecting the unwind of working capital positions from 2021 with the Group's net bank debt position being €73.8m. This reflects an increase in net bank debt of €25.5m primarily driven by investment in acquisitions and strategic capital projects.

Six months ended 30 June	2022 €'000	2021 €'000
Net cash inflow from operating activities	10,708	18,328
Net cash outflow from investing activities	(25,538)	(4,618)
Net cash inflow/(outflow) from financing activities	5,541	(2,869)
Foreign currency translation movement	(433)	1,104
(Decrease)/increase in cash and cash equivalents in the period	(9,722)	11,945
Movement in restricted cash	-	(3,097)
Cash flow from movement in borrowings	(15,788)	(4,770)
Movement in net bank (debt)/cash	(25,510)	4,078

The Group remains focused on strong working capital management, and this is reflected in the cash generated from operating activities of €10.7m. Stock balances have increased reflecting trading volumes and some increased stocking as a result of supply chain challenges.

The net cash outflow from investing activities of €25.5m primarily consists of payments for acquisitions of €14.2m and capital investments of €11.3m. Of the capital investments, €7.1m is strategic in nature including €5m for the commencement of investment in a new distribution facility.

The net cash inflow from financing activities of €5.5m was due to a further drawdown of borrowings to support business growth offset by principal lease payments and the payment of dividends.

Net banking facility

The Group has entered into a new five-year banking facility which more than doubles the revolving credit facility (RCF) to €400m with an additional uncommitted accordion facility of €150m. Three international banks, Barclays Bank, ING Bank and Citizens Bank joined the existing syndicate increasing the syndicate to seven banks. This new facility provides the platform to accelerate our ambitious growth strategy and acquisition pipeline.

Taxation

The tax charge in the period is €4.5m and equates to an effective tax rate of 17.3%. This compares to a charge of €5.4m in the same period last year and an effective tax rate of 16.8% for the 2021 financial year. The increase in the effective tax rate of 0.5% is attributable to the increased contribution of profits from higher tax rate 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 2.4% (vs 2.8% reported growth), gross profit increased 7.6% (vs reported growth 8.8%) and operating profit increased by 5.2% (vs 6.2% reported growth).

	H1 2022	H1 2021
	Average	Average
GBP	0.8422	0.8681
US Dollar	1.0928	1.2055
Swedish Krona	10.476	10.129

Return on capital employed

Return on capital employed for the rolling 12-month period closed at 16.6% (December 2021: 17.6%) performing in line with the Group's medium term target and reflecting both the increase in operating profit in the period and strong performance from our recent acquisitions. The investments made during 2021, both from a capital and acquisitions perspective, will deliver further benefits and growth in the coming years. The reduction since December 2021 reflects the impact of the Group's recent acquisitions where the Group has expanded into new geographies and higher margin opportunities.

Dividends

A final dividend of €3m relating to 2021 was paid in May 2022. The Board has committed to a progressive dividend policy and, reflective of this, a 2022 interim dividend of €1.7m (€0.0061 per ordinary share) has been declared. It is proposed to pay the dividend on 6 October 2022 to ordinary shareholders on the Company's register on 9 September 2022.

In accordance with company law and IFRS, these dividends have not been provided for in the Balance Sheet at 30 June 2022.

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 Cash Flow Statement, the Condensed Consolidated Group Statement of Changes in Equity 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 2022.

Signed on behalf of the Board

M. Pratt  G. Rabbette

29 August 2022

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 2022 Interim results of Uniphar Plc for the six month period ended 30 June 2022 (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 2022;

· 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

· the explanatory notes to the interim financial statements.

The interim financial statements included in the 2022 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 2022 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 2022 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 2022 Interim results in accordance with International Accounting Standard 34, 'Interim Financial Reporting', as adopted by the European Union. In preparing the 2022 Interim results, 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 2022 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

29 August 2022

Dublin

Notes:

(a)  The maintenance and integrity of the Uniphar plc 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 2022

		Six months ended 30 June 2022			Six months ended 30 June 2021
	Notes	Pre- exceptional (unaudited) €'000	Exceptional (note 3) (unaudited) €'000	Total (unaudited) €'000	Pre- exceptional (unaudited) €'000	Exceptional (note 3) (unaudited) €'000	Total (unaudited) €'000
Revenue	2	991,831	-	991,831	964,867	-	964,867
Cost of sales		(845,696)	-	(845,696)	(830,577)	-	(830,577)
Gross profit		146,135	-	146,135	134,290	-	134,290
Selling and distribution costs		(34,747)	-	(34,747)	(29,434)	-	(29,434)
Administrative expenses		(80,545)	(5,784)	(86,329)	(76,653)	(4,680)	(81,333)
Other operating income		19	-	19	86	-	86
Operating profit		30,862	(5,784)	25,078	28,289	(4,680)	23,609
Finance cost	4	(4,737)	-	(4,737)	(4,523)	1,623	(2,900)
Profit before tax		26,125	(5,784)	20,341	23,766	(3,057)	20,709
Income tax expense		(4,530)	284	(4,246)	(5,381)	-	(5,381)
Profit for the financial period		21,595	(5,500)	16,095	18,385	(3,057)	15,328
Attributable to:
Owners of the parent				16,061			15,348
Non-controlling interests				34			(20)
Profit for the financial period				16,095			15,328
Attributable to:
Continuing operations				16,095			15,328
Profit for the financial period				16,095			15,328
Earnings per ordinary share (in cent):
Continuing operations				5.9			5.7
Basic and diluted earnings per share (in cent)	5			5.9			5.7

Condensed Consolidated Group Statement of Comprehensive Income

for the six months ended 30 June 2022

		Six months ended 30 June 2022 (unaudited) €'000		Six months ended 30 June 2021 (unaudited) €'000
Profit for the financial period		16,095		15,328
Other comprehensive (expense)/income:
Items that may be reclassified to the Income Statement:
Unrealised foreign currency translation adjustments		(1,302)		3,995
Items that will not be reclassified to the Income Statement:
Actuarial gain in respect of defined benefit pension schemes		-		41
Total comprehensive income for the financial period		14,793		19,364
Attributable to:
Owners of the parent		14,759		19,384
Non-controlling interests		34		(20)
Total comprehensive income for the financial period		14,793		19,364
Attributable to:
Continuing operations		14,793		19,364
Total comprehensive income for the financial period		14,793		19,364

Condensed Consolidated Group Balance Sheet

as at 30 June 2022

ASSETS	Notes	30 June 2022 (unaudited) €'000	31 December 2021 (audited) €'000
Non-current assets
Intangible assets - goodwill	7	438,004	423,401
Intangible assets - other assets	7	23,196	22,968
Property, plant and equipment, and right-of-use assets	8	155,089	152,483
Financial assets - Investments in equity instruments		25	25
Deferred tax asset		2,622	1,734
Other receivables		426	388
Total non-current assets		619,362	600,999
Current assets
Assets held for sale	9	1,600	1,600
Inventory		129,352	112,312
Trade and other receivables		165,862	152,057
Cash and cash equivalents		68,303	78,025
Total current assets		365,117	343,994
Total assets		984,479	944,993
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		396	183
Other reserves		4,062	5,364
Retained earnings		60,615	47,555
Attributable to owners		263,415	251,444
Attributable to non-controlling interests		154	120
Total equity		263,569	251,564
LIABILITIES
Non-current liabilities
Borrowings	11	140,446	124,601
Provisions	12	91,357	90,401
Lease obligations	13	105,370	104,720
Total non-current liabilities		337,173	319,722
Current liabilities
Borrowings	11	1,664	1,721
Lease obligations	13	12,097	14,358
Trade and other payables		369,976	357,628
Total current liabilities		383,737	373,707
Total liabilities		720,910	693,429
Total equity and liabilities		984,479	944,993

Condensed Consolidated Group Cash Flow Statement

for the six months ended 30 June 2022

	Notes	Six months ended 30 June 2022 (unaudited) €'000	Six months ended 30 June 2021 (unaudited) €'000
Operating activities
Cash inflow from operating activities	15	19,166	26,075
Payment of deferred contingent consideration		(1,250)	(1,250)
Interest paid		(1,828)	(1,461)
Interest paid on lease liabilities	13	(1,824)	(1,866)
Corporation tax payments		(3,556)	(3,170)
Net cash inflow from operating activities		10,708	18,328
Investing activities
Payments to acquire property, plant and equipment - Maintenance		(3,489)	(2,166)
Payments to acquire property, plant and equipment - Strategic projects		(5,461)	(1,480)
Receipts from disposal of property, plant and equipment		72	-
Receipts from disposal of assets held for sale		-	350
Payments to acquire intangible assets - Maintenance		(821)	(3,061)
Payments to acquire intangible assets - Strategic projects		(1,670)	-
Payments to acquire subsidiary undertakings		(11,874)	(887)
Net working capital receipts from subsidiary undertakings		-	3,428
Payment of deferred and deferred contingent consideration		(2,295)	(977)
Receipt of deferred consideration receivable		-	175
Net cash outflow from investing activities		(25,538)	(4,618)
Financing activities
Proceeds from borrowings		15,133	19,000
Repayments of borrowings		(57)	(14,230)
Movement in restricted cash		-	3,097
Payment of dividends	6	(3,001)	(4,202)
Principal element of lease payments	13	(6,534)	(6,534)
Net cash inflow/(outflow) from financing activities		5,541	(2,869)
(Decrease)/increase in cash and cash equivalents in the period		(9,289)	10,841
Foreign currency translation of cash and cash equivalents		(433)	1,104
Opening balance cash and cash equivalents		78,025	60,410
Closing balance cash and cash equivalents	14	68,303	72,355

Condensed Consolidated Group Statement of Changes in Equity

for the six months ended 30 June 2022

	Share capital	Share premium	Share based payment reserve	Foreign currency translation reserve	Revaluation reserve	Capital redemption reserve	Retained earnings	Attributable to non- controlling interests	Total shareholders' equity
	€'000	€'000	€'000	€'000	€'000	€'000	€'000	€'000	€'000
At 1 January 2021	21,841	176,501	-	(1,860)	700	60	5,218	75	202,535
Profit for the financial period	-	-	-	-	-	-	15,348	(20)	15,328
Other comprehensive income:
Re-measurement gain on pensions (net of tax)	-	-	-	-	-	-	41	-	41
Movement in foreign currency translation reserve	-	-	-	3,995	-	-	-	-	3,995
Transactions recognised directly in equity:
Dividends paid (Note 6)	-	-	-	-	-	-	(4,202)	-	(4,202)
At 30 June 2021 (unaudited)	21,841	176,501	-	2,135	700	60	16,405	55	217,697
At 1 January 2022	21,841	176,501	183	4,604	700	60	47,555	120	251,564
Profit for the financial period	-	-	-	-	-	-	16,061	34	16,095
Movement in share-based payment reserve	-	-	213	-	-	-	-	-	213
Other comprehensive expense:
Movement in foreign currency translation reserve	-	-	-	(1,302)	-	-	-	-	(1,302)
Transactions recognised directly in equity:
Dividends paid (Note 6)	-	-	-	-	-	-	(3,001)	-	(3,001)
At 30 June 2022 (unaudited)	21,841	176,501	396	3,302	700	60	60,615	154	263,569

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 2021. The accounting policies applied in the interim financial statements are the same as those applied in the 2021 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 2021. 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 2021 in note 1 on pages 125 to 126.

The Group's interim financial statements are prepared for the six-month period ended 30 June 2022. 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 possible changes in trading performance and considering geopolitical risk.

Uniphar plays a significant role in the healthcare sector, ensuring continuity in the supply and distribution of much needed medicines, medical devices, and related services.

The Group has a robust capital structure with strong liquidity at the end of June 2022, supported by the recent renewal of our banking facility together with the addition of three new international banking partners. This provides a solid platform for the Group to deal with challenges that may arise caused by geopolitical or macroeconomic risks.

Having regard to the factors outlined above and noting the financial impact of the recently announced acquisition, 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

There have been no accounting standards, amendments and interpretations that are effective for the first time in respect of the Group condensed interim financial statements for the six months ended 30 June 2022.

New Standards and Interpretations not yet adopted

Certain new accounting standards and interpretations have been published that are not mandatory for 30 June 2022 reporting periods and have not been adopted by the Group. These standards are not expected to have a material impact in the current or future reporting periods and on foreseeable future transactions.

2. Revenue and segments

	2022 €'000	2021 €'000
Revenue	991,831	964,867

	2022	2021
	€'000	€'000
Commercial & Clinical - MedTech	118,873	112,082
Commercial & Clinical - Pharma	43,449	45,734
Commercial & Clinical	162,322	157,816
Product Access	74,474	85,954
Supply Chain & Retail	755,035	721,097
Total Revenue	991,831	964,867

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 two principal geographical regions being the Republic of Ireland and the UK. The Group also operates in other European countries and the US 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.

	2022	2021
	€'000	€'000
Ireland	853,798	815,259
UK	85,523	91,842
Rest of the World	52,510	57,766
	991,831	964,867

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, being, Commercial & Clinical, Product Access, and Supply Chain & Retail. These divisions align to the Group's operational and financial management structures:

· Commercial & Clinical provide outsourced services, specifically sales, marketing and multichannel account management to pharmaco-medical manufacturers, and distribution and support services to medical device manufacturers. Uniphar offers a fully integrated digitally enabled customer centric solution that is supported through market data, insights and digital programmes. We integrate these programmes with our supply chain and distribution capability to provide a full end-to-end service to manufacturers;

· Product Access consists of two service offerings, being: On Demand and Exclusive Access. On Demand provides access to pharmaco-medical products and treatments, by developing valuable relationships and interactions between manufacturers and other healthcare stakeholders. This business operates in both the retail and hospital markets in the Irish, UK and MENA markets. Exclusive Access provides bespoke distribution partnerships to pharmaceutical partners around key brands, with new programs focused on speciality pharmaceutical products. The division delivers a unique patient support program that allows healthcare professionals to connect with patients on a global basis; and

· Supply Chain & Retail provides both pre-wholesale distribution and wholesale distribution of pharmaceutical, healthcare and animal health products to pharmacies, hospitals and veterinary surgeons in Ireland. Uniphar operate a network of pharmacies under the Life, Allcare and Hickey's brands. Additionally, through the extended Uniphar symbol group, the business provides services and supports that help independent community pharmacies to compete more effectively.

Operating segments results

The Group evaluates performance of the operational segments on the basis of gross profit from operations.

	Commercial & Clinical	Product Access	Supply Chain  & Retail	Total
	Six months ended 30 June 2022
	€'000	€'000	€'000	€'000
Revenue	162,322	74,474	755,035	991,831
Gross profit	58,541	21,818	65,776	146,135
	Six months ended 30 June 2021
	€'000	€'000	€'000	€'000
Revenue	157,816	85,954	721,097	964,867
Gross profit	53,446	20,051	60,793	134,290

Assets and liabilities are reported to the Board at a Group level and are not reported on a segmental basis.

3. Exceptional charge

	2022	2021
	€'000	€'000
Professional fees including acquisition costs	2,014	1,938
Acquisition integration costs	1,060	250
Redundancy and restructuring costs	2,710	920
Defined benefit pension scheme settlement loss and closure costs	-	558
Foreign exchange revaluation of deferred contingent consideration	-	1,014
Exceptional charge recognised in operating profit	5,784	4,680
Decrease in deferred contingent consideration	-	(1,623)
Exceptional credit recognised in finance costs	-	(1,623)
Exceptional credit recognised in income tax expense	(284)	-
Total exceptional charge	5,500	3,057

Professional fees including acquisition costs

Professional fees including acquisition costs incurred during 2022 are primarily relating to costs relating to acquisitions disclosed in note 17 together with costs incurred on transactions currently under consideration.

Acquisition integration costs 

Acquisition integration costs primarily relate to payments made to staff agreed as part of the RRD International acquisition which do not qualify for classification as consideration due to the continuing employment requirement for the individuals.

Redundancy and restructuring costs

These costs include restructuring and reorganisation costs relating to group entities and recent acquisitions.

Exceptional credit recognised in tax charge

The tax credit recognised in the tax charge is the tax impact of the components of the Exceptional charge listed above.

4. Finance cost

	2022	2021
	€'000	€'000
Interest on lease obligations	1,824	1,866
Interest payable on borrowings and non-recourse costs	1,848	1,479
Fair value adjustment of deferred and deferred contingent consideration	953	1,074
Amortisation of refinancing transaction fees	133	121
Interest receivable	(21)	(17)
Finance cost before exceptional credit	4,737	4,523
Decrease in deferred contingent consideration (note 3)	-	(1,623)
Exceptional credit recognised in finance cost	-	(1,623)
Total Finance cost	4,737	2,900

5. Earnings per share

Basic earnings per share and diluted earnings per share for the six months ended 30 June have been calculated by reference to the following:

	2022		2021
Profit for the financial period attributable to owners (€'000)	16,061		15,348
Weighted average number of shares ('000)	272,297		267,137
Earnings per ordinary share (in cent):
-  Basic	5.9		5.7
-  Diluted	5.9		5.7

Adjusted earnings per share has been calculated by reference to the following:

	2022	2021
	€'000	€'000
Profit for the financial period attributable to owners	16,061	15,348
Exceptional charge recognised in operating profit (note 3)	5,784	4,680
Exceptional credit recognised in finance costs (note 3)	-	(1,623)
Exceptional credit recognised in income tax (note 3)	(284)	-
Tax credit on acquisition related intangibles	(178)	-
Amortisation of acquisition related intangibles (note 7)	1,423	673
Profit after tax excluding exceptional items	22,806	19,078
Weighted average number of shares in issue in the period (000's)	272,297	267,137
Adjusted basic and diluted earnings per ordinary share (in cent)	8.4	7.1

The weighted average number of ordinary shares 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.

6. Dividends

A final dividend of €3.0m (€0.011 per ordinary share) relating to 2021 was declared and paid in May 2022 (June 2021: €4.2m). Continuing with the Board's commitment to a progressive dividend policy, the Board declared a 2022 interim dividend of €1.7m (€0.0061 per ordinary share). It is proposed to pay the dividend on 6 October 2022 to ordinary shareholders on the Company's register on 9 September 2022.

In accordance with company law and IFRS, these dividends have not been provided for in the Balance Sheet at 30 June 2022.

7. Intangible assets, and right-of-use assets

	Computer software €'000			Trademark €'000	Goodwill €'000	Technology asset €'000	Brand Name €'000	Customer Relationships €'000	Total €'000
Cost
At 1 January 2022		36,180		153	442,110	2,914	11,238	3,126	495,721
FX movement		(15)		1	2,915	166	-	243	3,310
Acquisitions		-		-	11,688	-	-	-	11,688
Additions		2,491		-	-	-	-	-	2,491
Disposals/retirements		(62)		-	-	-	-	-	(62)
At 30 June 2022		38,594		154	456,713	3,080	11,238	3,369	513,148
Accumulated Amortisation
At 1 January 2022		28,127		153	18,709	419	1,215	729	49,352
FX movement		(4)		1	-	16	-	69	82
Amortisation		1,153		-	-	537	562	324	2,576
Disposals/retirements		(62)		-	-	-	-	-	(62)
At 30 June 2022		29,214		154	18,709	972	1,777	1,122	51,948
Net book amounts
At 31 December 2021		8,053		-	423,401	2,495	10,023	2,397	446,369
At 30 June 2022		9,380		-	438,004	2,108	9,461	2,247	461,200
Intangible assets		8,051		-	438,004	2,108	9,461	2,247	459,871
Right-of-use assets		1,329		-	-	-	-	-	1,329
At 30 June 2022		9,380		-	438,004	2,108	9,461	2,247	461,200

Reconciliation to Balance Sheet	30 June	31 December
	2022	2021
	€'000	€'000
Intangible assets- goodwill	438,004	423,401
Intangible assets- other assets	23,196	22,968
Intangible assets total	461,200	446,369

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 2021 and consequently no impairment indicators were identified. The Group's annual impairment assessment will be performed at 31 December 2022.

8.  Property, plant and equipment, and right-of-use assets

	Land and buildings	Leasehold improvements	Plant and equipment	Fixtures and fittings	Computer equipment	Motor vehicles	Instruments	Total
	€'000	€'000	€'000	€'000	€'000	€'000	€'000	€'000
Cost
At 1 January 2022	135,705	14,149	29,620	13,037	7,099	8,336	5,012	212,958
Foreign exchange movement	(22)	(17)	(63)	(51)	13	(48)	1	(187)
Additions	987	251	6,513	381	792	999	879	10,802
Acquisitions	3,229	189	-	175	17	-	-	3,610
Disposals/retirements	(450)	-	(459)	(51)	(699)	(1,454)	(354)	(3,467)
Reclassification	-	1,738	(1,970)	232	-	-	-	-
At 30 June 2022	139,449	16,310	33,641	13,723	7,222	7,833	5,538	223,716
Accumulated depreciation
At 1 January 2022	24,930	3,139	15,843	5,847	4,271	4,052	2,393	60,475
Foreign exchange movement	(29)	(11)	(51)	(27)	(4)	(28)	-	(150)
Charge for the period	5,572	726	1,702	909	545	1,260	783	11,497
Disposals/retirements	(429)	-	(450)	(38)	(659)	(1,277)	(342)	(3,195)
Reclassification	-	-	-	-	-	-	-	-
At 30 June 2022	30,044	3,854	17,044	6,691	4,153	4,007	2,834	68,627
Net book value
At 31 December 2021	110,775	11,010	13,777	7,190	2,828	4,284	2,619	152,483
At 30 June 2022	109,405	12,456	16,597	7,032	3,069	3,826	2,704	155,089
Reconciliation to Balance Sheet
Property, plant and equipment	4,995	12,456	16,165	7,032	3,069	96	2,704	46,517
Right-of-use assets	104,410	-	432	-	-	3,730	-	108,572
Net book value at 30 June 2022	109,405	12,456	16,597	7,032	3,069	3,826	2,704	155,089

Included in property, plant and equipment are assets under construction to the net book value of € 5,462 ,000 (2021: €1,555,000). Depreciation has not commenced on these assets.

9. Assets held for sale

	Properties	Total
	€'000	€'000
At 1 January 2022	1,600	1,600
Disposals	-	-
At 30 June 2022	1,600	1,600

Properties held for sale relate to properties acquired on completion of the acquisition of Bradley's Pharmacy Group. These properties are presented in the Balance Sheet at the lower of their carrying amount and fair value less any costs to sell. Uniphar plc acquired Bradley's Pharmacy Group from examinership in November 2018, and in accordance with the application of the examinership scheme arrangement acquired non-recourse borrowings which are secured by these properties.

The properties held for sale are available for immediate sale in their present condition subject to terms that are usual and customary for properties of this nature. The properties are being actively marketed and the Group is committed to its plan to sell these properties in an orderly manner. 

10. Called up share capital presented as equity

		30 June 2022
		€'000
Authorised:
453.2 million (2021: 453.2 million) ordinary shares of 8c each		36,256
16.0 million (2021: 16.0 million) "A" ordinary shares of 8c each		1,280
		37,536
Movement in the period in issued share capital presented as equity
	2022
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 (2021: 273,015,254) ordinary shares		21,841

11.  Borrowings

Bank loans are repayable in the following periods:

	30 June 2022 €'000	31 December 2021 €'000
Amounts falling due within one year	1,664	1,721
Amounts falling due between one and five years	140,446	124,601
	142,110	126,322

The Group's total bank loans at 30 June 2022 were €142,110,000 (2021: €126,322,000). Bank loans falling due within one year include €1,600,000 (2021: €1,600,000) arising on the acquisition of the Bradley's Pharmacy Group which is secured by a property acquired on the acquisition which is classified as held for sale. Following the disposal of this property the loan is required to be repaid (note 9).

At 30 June 2022, the Group's revolving credit facility loans in use were subject to an interest rate of Euribor +1.5% (2021: Euribor +1.5%).

Bank security

Bank overdrafts (including invoice discounting) and bank loans of €142,110,000 (2021: €126,322,000) are secured by cross guarantees and fixed and floating charges from the Company and certain subsidiary undertakings.

12. Provisions

	Deferred contingent consideration	Lease dilapidation	Warranty provision	Other	Total
	€'000	€'000	€'000	€'000	€'000
At 1 January 2022	88,918	523	77	883	90,401
Recognised during the period	-	-	74	801	875
Unwinding of discount	918	-	-	-	918
Utilised during the period	(3,188)	(116)	-	(915)	(4,219)
Foreign currency movement	3,323	-	(4)	63	3,382
At 30 June 2022	89,971	407	147	832	91,357

Deferred contingent consideration

Deferred contingent consideration represents the present value of deferred contingent consideration which would become payable based on pre-defined profit thresholds being met. During the period, payments of €3,188,000 were made in respect of prior periods acquisitions.

Lease dilapidation

The lease dilapidation provision covers the cost of reinstating certain Group properties at the end of the lease term. This is based on the terms of the individual leases which set out the conditions relating to the return of property. The timing of the outflows will match the ending of the relevant leases with various dates up to 2049.

Warranty provision

The warranty provision relates to a product warranty provided to customers on certain medical devices. The estimated cost of the warranty is provided for upon recognition of the sale of the product. The costs are estimated based on actual historical experience of expenses incurred and on estimated future expenses related to current sales and are updated periodically. Actual warranty costs are charged against the warranty provision.

Other

Other provisions relate to a management retention bonus payable in relation to the acquisition of RRD International in 2020.

13. Leases

(i) Amounts recognised in the Balance Sheet

The Balance Sheet shows the following amounts relating to leases:

	30 June 2022	31 December 2021
	€'000	€'000
Right-of-use assets:
Buildings	104,410	105,766
Plant and equipment	432	686
Motor vehicles	3,730	4,196
Computer Software	1,329	1,519
Net book value of right-of-use assets	109,901	112,167
Lease liabilities:
Current	12,097	14,358
Non-current	105,370	104,720
Total lease liabilities	117,467	119,078

Right-of-use assets are included in the lines 'Intangible assets' and 'Property, plant and equipment' on the Balance Sheet, and are presented in note 7 and 8.

Additions to the right-of-use assets during the period ended 30 June 2022 were €1,959,000 (2021: €4,498,000).

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 30 June 2022	Six months ended 30 June 2021
	€'000	€'000
Buildings	5,481	5,368
Plant and equipment	254	277
Motor vehicles	1,241	1,349
Right-of-use assets depreciation charge	6,976	6,994
Computer Software	190	190
Right-of-use assets amortisation charge	190	190
Interest on lease obligations (note 4)	1,824	1,866
Principal repayments	6,534	6,534
Total cash outflow in respect of leases	8,358	8,400

14.  Analysis of net debt

	30 June 2022	31 December 2021	30 June 2021
	€'000	€'000	€'000
Cash and cash equivalents	68,303	78,025	72,355
	68,303	78,025	72,355
Bank loans repayable within one year	(1,664)	(1,721)	(2,083)
Bank loans payable after one year	(140,446)	(124,601)	(100,613)
Bank loans	(142,110)	(126,322)	(102,696)
Net bank debt	(73,807)	(48,297)	(30,341)
Current lease obligations	(12,097)	(14,358)	(12,779)
Non-current lease obligations	(105,370)	(104,720)	(106,912)
Lease obligations	(117,467)	(119,078)	(119,691)
Net debt	(191,274)	(167,375)	(150,032)

15. Reconciliation of operating profit to cash flow from operating activities

	Six months ended 30 June 2022	Six months ended 30 June 2021
	€'000	€'000
Operating profit before exceptional items	30,862	28,289
Cash related exceptional items	(5,081)	(7,305)
	25,781	20,984
Depreciation	11,497	10,860
Amortisation of intangible assets	2,576	1,989
Increase in inventory	(16,270)	(561)
Increase in receivables	(13,195)	(22,479)
Increase in payables	8,755	14,744
Foreign currency translation adjustments	22	538
Cash inflow from operating activities	19,166	26,075

16. Financial instruments

Financial instruments by category

The accounting policies for financial instruments have been applied to the line items below:

	Financial assets at FVOCI*	Financial assets at amortised cost	Total	Fair value
	€'000	€'000	€'000	€'000
Financial assets
30 June 2022:
Investments in equity instruments	25	-	25	25
Trade and other receivables **	-	143,318	143,318	143,328
Deferred consideration receivable	-	450	450	451
Cash and cash equivalents	-	68,303	68,303	68,303
	25	212,071	212,096	212,107

*   Fair value through other comprehensive income.

**  Excluding prepayments and accrued income.

	Financial liabilities at FVTPL***	Financial liabilities at amortised cost	Total	Fair value
	€'000	€'000	€'000	€'000
Financial liabilities
30 June 2022:
Borrowings	-	142,110	142,110	149,371
Deferred acquisition consideration	-	3,977	3,977	4,009
Trade and other payables ****	-	213,215	213,215	213,215
Deferred contingent consideration	89,971	-	89,971	89,971
Lease liabilities	-	117,467	117,467	117,467
	89,971	476,769	566,740	574,033

***  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).

Long-term receivables

The fair value of long-term receivables is determined by discounting future cash flows at market rates of interest at the period end.

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.

Cash and cash equivalents, including short-term bank deposits

For short-term bank deposits and cash and cash equivalents, all of which have a remaining 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 acquisition consideration

Discounted cash flow method was used to capture the present value of the expected future economic benefits that will flow out of the Group arising from the deferred acquisition consideration.

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 profit 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 2015 to 2021.

The significant unobservable inputs are:

· Pre-defined profit thresholds which have not been disclosed due to their commercial sensitivities; and

· Risk adjusted discount rate of between 2% and 3% (2021: between 2% and 3%).

For the fair value of deferred contingent consideration, a 1% increase in the risk adjusted discount rate at 30 June 2022, holding the other inputs constant would reduce the fair value of the deferred contingent consideration by €1.5m. A 1% decrease in the risk adjusted discount rate would result in an increase of €1.5m 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 2022
Investments in equity instruments	-	-	25	25
Deferred contingent consideration	-	-	(89,971)	(89,971)
	-	-	(89,946)	(89,946)

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 2022:

	Shares in unlisted companies	Deferred  contingent consideration	Total
	€'000	€'000	€'000
At 1 January 2022	25	(88,918)	(88,893)
Recognised during the period	-	3,188	3,188
Unwinding of discount*	-	(918)	(918)
Released during the period*	-	-	-
Foreign currency movement	-	(3,323)	(3,323)
At 30 June 2022	25	(89,971)	(89,946)

* These amounts have been credited/(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 2021 Annual Report.

17. Acquisitions of subsidiary undertakings

A key strategy of the Group is to expand into higher growth, higher margin sectors and businesses. In line with this strategy, the Group completed the following acquisitions during the financial period:

· Chansey Holdings Limited & Edenmore Pharmacy Limited

The Group acquired 100% of the issued share capital of Chansey Holdings Limited & Edenmore Pharmacy Limited in January 2022. Both entities currently operate three independent retail pharmacies in Ireland.

· Boxted Limited

The Group acquired 100% of the issued share capital of Boxted Limited in February 2022. Boxted Limited currently operates an independent retail pharmacy in Ireland.

· Dr Hauschka Limited

The Group acquired 100% of the issued share capital of Dr Hauschka Limited in March 2022. Dr Hauschka Limited currently holds a distribution agreement for skincare products in Ireland.

· Lanesra Pharmacy Limited

The Group acquired 100% of the issued share capital of Lanesra Pharmacy Limited in May 2022. Lanesra Pharmacy Limited currently operates an independent retail pharmacy in Ireland.

· Mainarch Limited

The Group acquired 100% of the issued share capital of Mainarch Limited, in June 2022. Mainarch Limited currently operates an independent retail pharmacy in Ireland.

Goodwill is attributable to the future economic benefits arising from assets which are not capable of being individually identified and separately recognised. The significant factors giving rise to the goodwill include the value of the teams within the business acquired, the enhancement of the competitive position of the Group in the marketplace and the strategic premium paid by Uniphar Group to create the combined Group.

The initial assignment of fair values to net assets acquired has been performed on a provisional basis in respect of the acquisitions completed during 2022, due to their recent acquisition dates. The Group has 12 months from the date of acquisition to finalise the fair value of the assets/liabilities acquired, and any amendments to these fair values within the 12-month period from the date of acquisition will be disclosable in the 2022 Annual Report as stipulated by IFRS 3, Business Combinations.

The acquisitions completed in 2022 have contributed €3.0m to revenue and €1.4m of gross profit for the period since the date of acquisition. The proforma revenue and operating profit before exceptional items for the Group for the period ended 30 June 2022 would have been €994.1m and €31.4m respectively had the acquisitions been completed at the start of the current reporting period.

The provisional fair value of the assets and liabilities acquired as part of the acquisitions completed during the financial period are set out below:

	€'000
ASSETS
Non-current assets
Property, plant and equipment	3,610
	3,610
Current assets
Inventory	771
Trade and other receivables	1,264
Cash and cash equivalents	1,552
	3,587
Total assets	7,197
LIABILITIES
Non-current liabilities
Lease liabilities	2,983
	2,983
Current liabilities
Lease liabilities	246
Trade and other payables	1,617
	1,863
Total liabilities	4,846
Identifiable net assets acquired	2,351
Group share of net assets acquired	2,351
Goodwill arising on acquisition	11,688
Consideration	14,039

None of the business combinations completed during the period were considered sufficiently material to warrant separate disclosure of the fair values attributable to those combinations.

The gross contractual value of the trade and other receivables as at the respective dates of acquisition amounted to €1.3m. The fair value of these receivables is estimated at €1.3m (all of which is expected to be recoverable).

In the period to 30 June 2022, the Group incurred acquisition costs of €2.0m relating to acquisitions completed during the period together with costs incurred on transactions currently under consideration (2021: €1.9m). These have been included in administrative expenses in the Group Income Statement.

2021 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 2021 were performed on a provisional basis. The fair values attributable to the assets and liabilities of these acquisitions remain provisional with the exception of CoRRect Medical GmbH and BESTMSLs Group which were both purchased in July 2021. The amendments to these fair values were made to the comparative figures during the subsequent reporting window within the measurement period imposed by IFRS 3. The provisional fair value of these assets and liabilities recorded at 31 December 2021, together with the adjustments made in 2022 to those carrying values to arrive at the revised fair values are as follows:

	Provisional fair value of 2021 acquisitions	Measurement period adjustment		Total
	€'000	€'000		€'000
ASSETS
Non-current assets
Intangible assets	25	2,191		2,216
Deferred tax asset	-	(432)		(432)
Property, plant and equipment	1,570	-		1,570
	1,595	1,759		3,354
Current assets
Inventory	472	-		472
Trade and other receivables	4,943	-		4,943
Cash and cash equivalents	5,718	-		5,718
	11,133	-		11,133
Total assets	12,728	1,759		14,487
LIABILITIES
Non-current liabilities
Lease liabilities	1,181	-		1,181
Bank borrowings	352	-		352
Other non-current liabilities	162	-		162
	1,695	-		1,695
Current liabilities
Lease liabilities	248	-		248
Trade and other payables	3,509	-		3,509
	3,757	-		3,757
Total liabilities	5,452	-		5,452
Identifiable net assets acquired	7,276	1,759		9,035
Non-controlling interest arising on acquisition	-	-		-
Group share of net assets acquired	7,276	1,759		9,035
Goodwill arising on acquisition	55,296	(1,759)		53,537
Consideration	62,572	-		62,572

18. Post balance sheet events

On 23 August 2022, the Group reached agreement to acquire Orspec Pharma Pty Ltd. headquartered in Australia. This is the first acquisition for the Group in the strategically important APAC market and is consistent with the Group's strategy of building a global presence in the Product Access division.

As this is a recent acquisition, the fair values of the major classes of assets acquired and liabilities assumed will be disclosed in the 2022 Group Annual Report as the initial accounting for these business combinations are incomplete at the time of issuing our interim financial statements.

On 19 August 2022, the Group completed the renewal of its banking facility for a further five years more than doubling the revolving credit facility (RCF) to €400m with an additional uncommitted accordion facility of €150m. As part of the renewal, three new international banking partners, Barclays Bank, ING Bank and Citizens Bank, have joined the banking syndicate. This new enlarged facility further strengthens the banking platform to support the Group's future growth and investment.

There have been no other material events subsequent to 30 June 2022 that would require adjustment to or disclosure in this report.

19. Comparative amounts

The comparative amounts have been updated for amendments to the fair value of assets and liabilities acquired during 2021, these amendments were within the measurement period imposed by IFRS 3.

20. Approval by the Board of Directors

The Directors approved the interim financial statements on 29 August 2022.

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.

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 & Adjusted EBITDA	Earnings before exceptional items, net finance expense, income tax expense, depreciation, and intangible assets amortisation. Earnings before exceptional items, net finance expense, income tax expense, depreciation, and intangible assets amortisation, adjusted for the impact of IFRS 16 and the pro-forma EBITDA of acquisitions.	EBITDA provides management with an assessment of the underlying trading 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.
Net bank debt	Net bank debt represents the net total of current and non-current borrowings, cash and cash equivalents, and restricted cash as presented in the Group Balance Sheet.	Net bank debt is used by management as it gives a summary of the Group's current leverage which management will consider when evaluating investment opportunities, potential acquisitions, and internal resource allocation.
Net debt	Net debt represents the total of net bank debt, plus current and non-current lease obligations as presented in the Group Balance Sheet.	Net debt is used by management as it gives a complete picture of the Group's 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 before amortisation of acquired intangible assets and exceptional items (if any).	Adjusted operating profit is used to assess the underlying operating performance excluding the impact of non-operational items. This is a key 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 the parent as reported in the Group Income Statement before exceptional items (if any) and amortisation of acquisition related intangibles, divided by the weighted average number of shares in issue in the period.	Adjusted EPS is used to assess the after-tax underlying performance of the business in combination with the impact of capital structure actions on the share base. This is a key measure used by management to evaluate the businesses operating performance, generate future operating plans, and make strategic decisions.
Like for Like adjusted earnings per share	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 exceptional items (if any) and amortisation of acquisition related intangibles, by the weighted average number of shares in issue in the current period.	Like for like adjusted EPS is used to assess the after-tax underlying performance of the business assuming a constant share base.
Free cash flow conversion	Free cash flow conversion calculated as EBITDA, less investment in working capital, less maintenance capital expenditure, less foreign exchange translation adjustment, divided by EBITDA.	Free cash flow represents the funds generated from the Group's ongoing operations. These funds are available for reinvestment, and for future 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 is calculated as the 12 months rolling operating profit before the impact of exceptional costs and amortisation of acquisition related intangibles, 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.	This measure allows management to monitor business performance, review potential investment opportunities and the allocation of internal resources.

EBITDA

		Six months ended/as at 30 June 2022	Six months ended/as at 30 June 2021
		€'000	€'000
Operating profit	Income Statement	25,078	23,609
Exceptional charge recognised in operating profit	Note 3	5,784	4,680
Depreciation	Note 8	11,497	10,860
Amortisation	Note 7	2,576	1,989
EBITDA		44,935	41,138
Adjust for the impact of IFRS 16		(8,349)	(8,400)
Pro-forma EBITDA of acquisitions		454	6
Adjusted EBITDA		37,040	32,744

Net bank debt

		30 June 2022	31 December 2021	30 June 2021
		€'000	€'000	€'000
Cash and cash equivalents	Balance Sheet	68,303	78,025	72,355
Bank loans repayable within one year	Balance Sheet	(1,664)	(1,721)	(2,083)
Bank loans payable after one year	Balance Sheet	(140,446)	(124,601)	(100,613)
Net bank debt		(73,807)	(48,297)	(30,341)

Net debt

		30 June 2022	31 December 2021	30 June 2021
		€'000	€'000	€'000
Net bank debt	APMs	(73,807)	(48,297)	(30,341)
Current lease obligations	Balance Sheet	(12,097)	(14,358)	(12,779)
Non-current lease obligations	Balance Sheet	(105,370)	(104,720)	(106,912)
Net debt		(191,274)	(167,375)	(150,032)

Leverage

		30 June 2022	31 December 2021	30 June 2021
		€'000	€'000	€'000
Net bank debt	APMs	(73,807)	(48,297)	(30,341)
Rolling 12 months adjusted EBITDA		75,999	71,703	65,988
Leverage (times)		0.97	0.67	0.46

Adjusted operating profit

		30 June 2022	30 June 2021
		€'000	€'000
Operating profit	Income Statement	25,078	23,609
Amortisation of acquisition related intangibles	Note 7	1,423	673
Exceptional charge recognised in operating profit	Note 3	5,784	4,680
Adjusted operating profit		32,285	28,962

Adjusted earnings per share

	Six months ended 30 June 2022	Six months ended 30 June 2021
	€'000	€'000
Adjusted earnings per share has been calculated by reference to the following:
Profit for the financial period attributable to owners	16,061	15,348
Exceptional charge recognised in operating profit (note 3)	5,784	4,680
Exceptional credit recognised in finance costs (note 3)	-	(1,623)
Exceptional credit recognised in income tax (note 3)	(284)	-
Tax credit on acquisition related intangibles	(178)	-
Amortisation of acquisition related intangibles (note 7)	1,423	673
Profit after tax excluding exceptional items	22,806	19,078
Weighted average number of shares in issue in the period (000's)	272,297	267,137
Adjusted basic and diluted earnings per ordinary share (in cent)	8.4	7.1
Like for like weighted average number of shares (000's)	272,297	272,297
Like for like adjusted earnings per ordinary share (in cent)	8.4	7.0

Free cash flow conversion

			Six months ended 30 June 2022	Year ended 31 December 2021	Six months ended 30 June 2021
			€'000	€'000	€'000
EBITDA	APMs		44,935	86,481	41,138
(Increase)/decrease in inventory	Note 15		(16,270)	3,726	(561)
Increase in receivables	Note 15		(13,195)	(26,169)	(22,479)
Increase in payables	Note 15		8,755	13,388	14,744
Foreign currency translation adjustments	Note 15		22	22	538
Payments to acquire property, plant and equipment - maintenance	Cash Flow		(3,489)	(8,795)	(2,166)
Payments to acquire intangible assets - maintenance	Cash Flow		(821)	(3,904)	(3,061)
Settlement of acquired financial liabilities*			1,429	1,513	487
Free cash flow			21,366	66,262	28,640
EBITDA			44,935	86,481	41,138
Free cash flow conversion			47.5%	76.6%	69.6%

* 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 2022 €'000	30 June 2021 €'000	30 June 2020 €'000
Rolling 12 months operating profit	46,616	43,503	32,315
Adjustment for 12 months exceptional costs	15,508	10,871	10,437
Acquisition related 12 months intangible amortisation	2,813	897	60
Adjusted 12 months rolling operating profit	64,937	55,271	42,812
Total equity	263,569	217,697	186,590
Net bank debt/(cash)	73,807	30,341	(1,386)
Deferred contingent consideration	89,971	81,455	77,102
Deferred consideration payable	3,977	4,244	6,072
Total capital employed	431,324	333,737	268,378
Average capital employed	382,531	301,058
Adjustment for acquisitions (note A / B below)	7,909	12,406
Adjusted average capital employed	390,440	313,464
Return on capital employed	16.6%	17.6%
Note A: Adjustment for acquisitions (2022)	Capital employed	Completion Date	Adjustment
	€'000		€'000
Dr Hauschka	1,541	Mar-22	(257)
Other acquisitions completed during 2021 and 2022	53,909	Various	8,166
Adjustment for acquisitions			7,909
Note B: Adjustment for acquisitions (2021)	Capital employed	Completion Date	Adjustment
	€'000		€'000
Hickey's	54,428	Nov-20	4,536
Other acquisitions completed during 2020 and 2021	45,506	Various	7,870
Adjustment for acquisitions			12,406

The adjustment ensures that the capital employed of acquisitions completed during the period are appropriately time apportioned. 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.

 

END

 

 

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