Third-quarter revenues and profits were ahead year-on year at UDG Healthcare, the Dublin-based health outsourcing group, thanks to medical outsourcing growth and recovery in supply chain services.

UDG, the former United Drug Group, said the improvement came as its Ashfield commercial and medical outsourcing arm became the largest profit-contributing division for the first time.

The supply chain services business endured challenging market conditions but maintained "solid" trading in the period, with profits flat year-on-year thanks to strong momentum in the US continuing from the previous quarter.

Based on the underlying trading performance the company reiterated previous guidance of adjusted diluted earnings per share for the full year of between 5% and 9% ahead of last year at constant currency.

UDG, which provides sales and marketing, drug wholesaling, medical equipment and specialist healthcare delivery services, said the third-quarter result had helped group revenues and adjusted operating profits for the first nine months of its financial year rise higher than the same period last year.

Profit growth was strong particularly within the healthcare communications businesses due to a combination of organic growth and acquisitions.

The North American business continued its strong performance and the start-up Japanese business moved into profitability in the quarter.

Meanwhile, the acquisition of KnowledgePoint360 in the healthcare communications area has encouraged management with integration going to plan and the business performing well.

Sharp packaging grew revenues and profits "well ahead" year-on-year, with the European business making a small operating loss.

A second phase of investment of €35m at the Allentown packaging facility has the potential to add an additional 25% to US capacity over four to five years.

Shares in UDG were down 0.6% to 342.2p at 11:28 on Thursday.

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