Celesio increases full-year forecasts

Celesio, the drug wholesaler and pharmacy group, has increased its forecasts for the full year after beating expectations in the third quarter, writes Dominic Coyle.

The German group saw pre-tax profits rise by a third in the three months to €121.9 million from €91.4 million in the same period last year and ahead of the consensus estimate of €113 million, despite a 3.8 per cent rise in sales to €4.75 billion that was below forecasts.

Celesio, formerly called Gehe, owns Ireland's third-largest wholesale drug distributor, Cahill May Roberts, and the 55-strong Unicare chain.

Turnover of €318.7 million at Cahill May Roberts to date in 2004 continued to run close to 19 per cent ahead of the year-ago period, as it had at the half-year stage.

The group has been struggling to preserve market share despite rising sales. However, it has won the tender to supply vaccines to general practitioners throughout the State. It has also taken steps to contain costs and invest in equipment to counter intense discount competition.

Cahill May Roberts said that pre-tax profits are in line with expectations so far this year.

On the retail side, the Unicare chain has opened one new pharmacy this year with another two due to open before the year-end. Turnover so far this year has risen 8.7 per cent compared with the first three quarters of 2003 to €82.4 million. The group again said that profit was in line with expectations, although this is not broken out in the figures.

Mr Paul O'Hanlon, managing director of Celesio's Irish retail operations, said he was very happy with the group's performance in a "very competitive market".

While the group still awaits the long-promised pharmacy review group report, Mr O'Hanlon said it was working on the assumption that the current deregulated market was here to stay.

"The reality is that markets across Europe in business are deregulating and it is very hard to go back once you have made that move," he said.

Celesio said it saw pre-tax profits in 2004 rising by more than 20 per cent, ahead of earlier guidance of at least 15 per cent growth.