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Celesio posts loss despite positive Lloydspharmacy performance

Celesio management board chairman Marc Owen: 'prime goal' to ensure benefits of US takeover are seen 'as quickly as possible'

Celesio's net profits are down $15m on year but its pharmacy division revenue increased 5.4 per cent to £1.4 billion

Celesio has reported a £12 million loss in the first half of 2014, despite increased service revenue from Lloydspharmacy.

Celesio's revenue rose 1.8 per cent compared to the same period last year, but it faced a net loss of £11.8m (€15m), it said in its financial report published yesterday (July 31).

In the UK, Lloydspharmacy's increased revenue from services in hospitals and homecare "more than compensated" for the negative effects of government measures and the costs of expanding a virtual pharmacy network, Celesio said.

A "more favourable product mix" for wholesaler AAH in the UK, combined with better purchasing conditions and efficiency increases, had led to a "gratifying increase in earnings", Celesio added.

The company's overall pharmacy division saw revenue increase 6 per cent to £1.41 billion (€1.78bn), while revenue from wholesaling across all markets rose 1.1 per cent to £7.28bn (€9.15bn).

Last year, Celesio saw its operating profits dip marginally, 0.7 per cent, but forecast "slight growth" for 2014.

Celesio blamed its overall drop in profits so far this year on "intense pressure from competition" in Germany and an "unfavourable performance" in Brazil. The expansion of its European network would enable stronger growth next year, it predicted.

Marc Owen, chair of Celesio's management board, said the company had "maintained its course well" in 2014 "despite strong headwinds".

It was the "prime goal" of Celesio to ensure that its customers and employees benefited "as quickly as possible" from the company's takeover by US healthcare giant McKesson earlier this year, he added.

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It might turn out to have been a perfect time for a sale by Celesio to Mckesson

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