Peripherals hold back AAH result: Management problems in two divisions

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DISAPPOINTING performances at two peripheral divisions held back profits at AAH, the company best known for pharmaceutical wholesaling and retailing.

Pre-tax profits for the six months to 30 September rose to pounds 19.1m from pounds 17.5m, a 9 per cent advance. However, profits from AAH's healthcare-related activities rose 19 per cent.

John Padovan, chairman, blamed management problems at the company's environmental services division and its distribution side for restricting group performance.

Mr Padovan said new managing directors had been appointed at both divisions. In the half year operating profits from environmental services dropped to pounds 2.4m from pounds 3m. Distribution contributed pounds 900,000 compared with pounds 1.3m last time.

Stronger profits in health care were helped by the acquisition of a drugs wholesaler in Ireland and by additions to AAH's chain of retail chemists.

Earnings per share slipped back to 14.7p from 15.4p because AAH has issued shares to make acquisitions.

John Aldersley, an analyst at Smith New Court, reduced his profit forecast for the year to next March by pounds 2.5m to pounds 42.5m. Shares fell 13p to 482p.