AAH buys chemist chain

THE HEALTHCARE concern AAH has enlarged its chain of retail pharmacies by 12 per cent with the purchase of 29 outlets in Yorkshire and Humberside, writes Robert Cole.

Lincoln-based AAH has paid pounds 12.5m for the Foster & Plumpton Group, equivalent to pounds 430,000 per outlet.

It takes the number of chemists owned by the company to 275. AAH is best known as a drugs wholesaler but also has distribution and environmental services divisions.

AAH and its rivals in pharmaceutical supply, Lloyds Chemists and Unichem, have been chasing independent drug retailers hard. Licensed chemists are seen as lucrative profit-earners.

Foster's selling price of pounds 12.5m compares with net assets of pounds 850,000 and profits before tax of pounds 212,000. But guaranteed business from NHS prescriptions gives retail pharmacies significant attractions.

In interim results announced by AAH last week operating profit margins from retail chemists were three times as high as for the group as a whole.

In the year to 31 March AAH earned trading profits of pounds 5.6m from high street chemists. By taking advantage of reduced overheads it estimates Foster will add pounds 1.5m in a full year.

AAH is issuing shares to pay pounds 7.3m of the consideration, with the rest met by loans. The shares fell 1p to 491p.