German pharmaceutical group Celesio - parent of Midlands-based Lloydspharmacy - yesterday prescribed strong nine-month results but indicated it may have hit a temporary plateau.
Pretax profits for the first three quarters of 2005 showed a double-digit increase - up 13.1 per cent.
But the the third three months weakened to 8.7 per cent against advances of 15.5 per cent and 16.3 per cent in the first two.
The slip appears to be a mere blip - down to NHS price
reductions which have hit progress in the UK "and hence the growth of group revenue in the current year".
As a result Celesio said profit margins were set to "stabilise" at the nine month level although the full year outcome would still exceed 2004, with pretax profit ahead 10-12 per cent.
And with the European pharmaceutical market surging by five per cent a year the future looks good.
Celesio said its performace was also down to "consistent cost management and improved operational processes".
In the first nine months revenues rose by 6.8 per cent to 15.1 billion euros (£10.2 billion).
Profit before tax climbed to 403.9 million euros (£273 million). This represents a return on sales of 2.67 per cent against 2.52 per cent the previous year.
Net profit rose by 29.5 per cent to a total of 317.1 million euros (£214.2 million).
Earnings per share at 3.69 euros compared with 2.85 euros in 2004. Cash flow rose by 23.7 per cent to 400.1 million euros (£270.3 million).
Fritz Oesterle, chairman of the management board and Celesio's chief executive, said: "This is an excellent result, given the high rates of growth already achieved in 2004. It is proof of the soundness and quality of the Celesio business model."
The group's three divisions, Wholesale, Pharmacies and Solutions, covered "the entire spectrum, and so is not dependent on individual customers, medicines or national pharmaceutical markets".
Mr Oesterle stressed that the healthcare sector was growing more quickly than the general economy of the European states. "The demographic development plays a crucial role in this," he noted. "The average age of the population is rising and the demand for medical provision grows as age advances. Therefore, the pharmaceutical market and also Celesio grows alongside it."
Celesio said it was optimistic for the year as a whole outcome. In the Wholesale division growth was set to be in line with the market. In Pharmacies growth would be slightly ahead.
Mr Oesterle added: " Reductions in the price of medicines, particularly in the UK, will, however, continue to dampen the market and hence growth within the group in the current year."
The Solutions arm, which provides services relating to medicine, had a "particular strong potential in the medium to long term".
Mr Oesterle said: "Celesio will benefit from the fact that the pharmaceutical industry is increasingly outsourcing services on a European level such as logistics and warehousing."
Saying the division was positioning itself as a full service provider in all areas around medicines for manufacturers and other customer groups, he added: "Here attractive opportunities are opening up to us, which is why we shall invest even more in this pillar in future."
Celesio has more than 34,000 employees and operates across seven European countries. It has 1,917 pharmacies and 137 wholesale branches.
In the nine months it acquired 35 pharmacies, opened 18 new ones and closed or sold 19.
Lloydspharmacy is the leading chain in the UK with more than 1,400 pharmacies across the country. It employs over 13,000 staff and dispenses 100 million prescription items annually.
UK turnover in 2004 was £1.28 billion, up 8.8 per cent.
Initiatives have included free diabetes and blood pressure testing, while it has handed out one million nit combs, also free of charge.
Lloydspharmacy was founded by Allen Lloyd, a car enthusiast who was back in the news last week in a court row over a Lister Jaguar sports model.