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Celesio confident despite drop in pharmacy earnings

Business Lloydspharmacy's parent company has reported a 0.9 per cent drop in earnings from its pharmacy division for the first quarter of 2013, but has maintained it is seeing “positive operational development” in its UK pharmacy business.

First-quarter earnings at Lloydspharmacy parent Celesio's retail pharmacy division fell 0.9 per cent year on year, but the company insisted there was a "positive operational development" in its UK pharmacy business.


Celesio said this week (May 14) that last year's restructuring programme, which involved a rollout of the Lloyds brand across European pharmacies and staff cuts at its UK head office, had boosted its performance in the UK. But it claimed that the weak British pound and government measures had hampered its earnings growth in the UK market, in announcing its 2013 first-quarter performance.


Overall, Celesio suffered a 10.4 per cent year-on-year drop in operating earnings to €126.6 million (£107.2m) for the quarter, which it attributed to factors such as increased wholesale competition in Germany. Pre-tax profits fell 11.7 per cent in the same period, but Celesio said this should not overshadow the "very good progress" it was making in its strategy, to which it attributed the 4.5 per cent rise in 2012 profits.


Celesio claimed that the weak British pound and government measures had hampered its earnings growth in the UK

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Celesio said the pilot of its independent pharmacy network, launched in December as a potential rival to Boots' Alphega, would be a priority for the year ahead.


The company reported "highly positive reactions" to the initiative, which gives independents access to Lloydspharmacy services and business modules, and plans to grow the network from five member pharmacies to 95 across Europe.


Celesio is confident it will achieve its goals for revenue growth this year, expecting to generate earnings of between £378m (€445m) and £403m (€475m) for 2013, compared with £377.8m (€444.8m) in 2012.


Read Celesio's interim report on the first quarter of 2013 here.


How has your pharmacy business fared over the past quarter?

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