Sentiment has turned sharply against Lloyds. Yesterday the shares fell another 1p to a 12-month low of 228p. Three months ago they stood at 372p, but have fallen nearly 40 per cent since. After handsomely outperforming the market for most of the past year, they are now underperforming.
The market has lost confidence in Mr Lloyd as a deal maker. Last week he paid about pounds 4m for a string of 89 newsagents, which he plans to convert into non-licensed retail outlets - Supersave or Holland and Barrett health shops.
The acquisition from receivers was at a good price and Mr Lloyd selected the best 89 sites from a 140-strong portfolio. However, there are fears that he is pressing ahead because he needs to acquire businesses to boost earnings. That raises more general doubts - common to MTM and BM - about the quality of earnings in quickly expanding companies.
If Lloyds' share price continues to follow the disappointing trail blazed by MTM and BM, the irony for some shareholders will be cruel. In the fight for the rival chemist Macarthy, the target's shareholders took Lloyds equity but turned down an all-share offer from the Scottish conglomerate Grampian Holdings because of doubts about the quality of Grampian's paper.
With the solid base of pharmacy sales Mr Lloyd should be able to convince shareholders that the shares deserve a better rating. But he has his work cut out.
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