Lloyds parent expects profit drop in wake of cat M clawback
Lloydspharmacy's parent company has predicted this year's earnings will fall below 2016 levels, due to recent cuts to prescription reimbursements.
The Celesio Group's profits fell in the first half of its 2017 fiscal year – from April 1 to September 30, 2016, the German-based company said in a statement today (November 22).
The company's earnings (before interest and taxes) for "continuing operations" fell 36% to €146.3 million in the six months to September 2016, compared with the same period in 2015, it said.
It also reported a revenue decrease of 2.8% compared to the first half of 2016's financial year. Between April and September 2016 revenue came to €10.4 billion, compared to €10.7bn a year earlier.
The Department of Health (DH) reduce category M payments by a total of £48 million between June and September 2016, and Celesio said it expects its 2017 earnings to fall "slightly below" last year's figures, as a result of the "UK government reimbursement cuts to prescription products".
Celesio also attributed the decline in earnings to the sale of its Norwegian and Swedish businesses to its US-based parent company McKesson, as well a "devaluation of the British pound" leading to "negative exchange rate effects".