Lloyds Chemists offers reassurance

ALLEN LLOYD, chairman of the fast-growing Lloyds Chemists, has moved to reassure the City after a 40 per cent dive in the value of the shares.

He said that Lloyds 'remains a strong, well-managed company', and he is confident about future prospects.

Investors are concerned that Lloyds is growing too quickly. There are also worries that the company will suffer from a new pricing schedule for some drugs supplied to National Health Service patients.

Yesterday Mr Lloyd promised to consolidate. 'We do not expect to make any issue of new shares in the next 12 months, either to reduce debt or to finance acquisitions,' he said.

He admitted that the new NHS price schedule will reduce Lloyds' annual taxable profits by between pounds 5m and pounds 8m. The admission explains a profit forecast downgrading on Wednesday by Panmure Gordon, Lloyds' stockbrokers. Shares rallied yesterday after the statement and as news spread that Mr Lloyd is coming to London today to give a presentation to investors. They closed at 235p, up 36p.

Mr Lloyd will tell investors that despite the softening of revenues from the NHS, other sales are strong.

In the second half of the financial year to 30 June, turnover in the chemist division rose 9 per cent against the comparable period. Sales were up 6 per cent in Supersave drugstores and were 5 per cent better in the Holland & Barrett health food shops.

Shares also benefited from a positive trading statement from Lloyds's rival, Boots.

Lloyds has promised to pay a 5.55p dividend for the year, up 33 per cent.