Chemist chain Boots said today its profit would be at the low end of market forecasts and abandoned its health services business to refocus on its core health and beauty products.
Boots said sales had continued to rise strongly at its 1,400 pharmacies but had been largely driven by price cuts that had eaten into profit margins.
"Management anticipates delivering full-year profit before tax and exceptional items towards the lower end of market expectations," it said in a trading update.
Analysts are expecting profits of between £575 million and £605 million for the year to March 31st, 2003.
Facing stiff competition from supermarkets in its core health and beauty markets, Boots has tried selling everything from CDs to car parts in recent years in a bid to boost sales.
More recently, it has invested in health services such as beauty salon treatments and botox injections under the brand-name Wellbeing Services.
Boots, which scrapped Wellbeing's alternative treatments such as aromatherapy in February, said today it was now withdrawing all health services except dentistry and footcare.
The firm also said it would also close loss-making European operations and work on improving its businesses in Asia.