Blame for Unicare fall put on outlet closures

Celesio, the German owner of the Unicare pharmacies, said revenue at the chain dropped 1.4 per cent last year after disposing of three outlets.

Stuttgart-based Celesio, Europe's biggest pharmaceutical distributor, said revenue at its Irish pharmacy business fell to €112.3 million in 2005 from €113.9 million a year earlier. The company's overall revenue rose 7 per cent to a record €20.5 billion.

Paul O'Hanlon, the managing director of Unicare, attributed the decline in Irish revenue to the closure of three pharmacies at the start of 2005. The company has since opened three new outlets, two in December and one in January, bringing the total number of outlets to 59.

Unicare, whose operations are mostly in Dublin and Limerick, is keen to expand further, Mr O'Hanlon said. "As and when opportunities arise, and we have the right location, we will open more pharmacies," he said. "We don't have a target number - we really go by what the market dictates." Celesio, formerly known as Gehe, entered the Irish market with the acquisition of the Crowley's and Ryan chains. The group followed those deals with the €152.4 million-purchase in 2000 of 29 outlets in the Unicare chain, and it has become the market leader by number of pharmacies. However, more than 200 new pharmacies have opened in Ireland in the past five years, putting pressure on existing operators.

Increased competition has made pharmacy "a tough market," Mr O'Hanlon said.

"We are making good steady progress, though. We're very optimistic." British pharmacy groups Boots and Alliance UniChem last year announced a merger to create a 2,600-store healthcare giant. The combination may have implications for the Irish pharmacy market where Boots has about 50 stores and is supplied by Celesio-owned Cahill May Roberts.

"We shall seize any opportunity that arises from the realisation of this merger with the same creativity and flexibility with which we meet all the other challenges of our market," Celesio chairman Fritz Oesterle said in a letter to shareholders released yesterday.

Unicare is trying to differentiate its business from competitors by investing in its outlets and adding new services that will draw more customers to its pharmacies, the managing director said. It offers diabetes screenings, among other services, and last spring trained its sales staff to advise customers on the importance of sun protection.

While revenue declined at Unicare last year, Celesio's wholesale operation in the Republic posted an 8.8 per cent gain in turnover, figures released yesterday showed. Revenue at Cahill May Roberts climbed to €255.4 million last year from €234.7 million in 2004.

Celesio does not break out profit or loss figures for its subsidiaries, and declined to provide reasons for changes in revenue in Ireland. Net profit at the entire Celesio group rose 25 per cent to €424.9 million, helped by a trade tax refund and acquisitions in Portugal and Slovenia.