Bid costs knock Lloyds Chemists

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The Independent Online
Lloyds Chemists yesterday warned that the costs and uncertainties surrounding the twin pounds 650m takeover bids for the company will hit this year's results. Announcing a dip in half-way profits, Michael Ward, managing director, said the full-year results would be affected by the costs of the bids, likely to amount to less than pounds 5m, and uncertainties over the outcome.

Lloyds has lost managers and staff in the Health and Beauty chain, the new name for the refurbished and reorientated stores from Lloyds' troubled Drugstore division, which may be targeted for disposal following a takeover.

The group is likely to have to wait until July to discover its fate after the offers from Germany's Gehe and UniChem, the rival British chemists chain, were kicked into touch by the decision to refer them both to the Monopolies and Mergers Commission.

Pre-tax profits at the group slipped from pounds 26.6m to pounds 25.8m in the six months to December, but Mr Ward dismissed suggestions that Lloyds had rushed into the arms of a bidder after the group had run out of steam.

The figures were hit by higher interest charges, which rose from pounds 3.4m to pounds 4.3m, and a pounds 1.1m loss on the sale of property, up from pounds 200,000 before. Losses in the drugstores tripled to pounds 1.32m.

Like-for-like sales in the main chemists operations rose 4.3 per cent. There was sales growth in most areas, but Mr Ward said competition from supermarkets kept over-the-counter medicines, representing 20 per cent of the business, relatively static. The chemists' profits nudged ahead from pounds 20.8m to pounds 22m.

The interim dividend goes up from 2.9p to 3.1p.