German health group Celesio, which owns the Midlands-based Lloyds Chemists chain, is again on the acquisition trail.
Its drive for growth was announced as it posted much improved half year profits.
"We are confident that we will achieve a profit growth in double digits for 2005," pledged chief executive Fritz Oesterle.
But the group's profit performance has been held back in the UK after Government imposed price cuts of around seven per cent.
Celesio, which operates across Europe and employs more than 34,000 people, saw pre-tax profits rise 15.5 per cent to 264.6 million euros (£183.7 million).
Revenues rose by seven per cent to 10.1 billion euros.
This was partly down to acquisitions in Portugal and Slovenia, with like for like revenues ahead 4.1 per cent.
"The significant rise in revenue was achieved despite price reductions, particularly in the UK," the company said.
Mr Oesterle said: "Taking into account the market environment, which has in part been difficult, we are very pleased with the group's performance during the first six months of this year."
And he insisted this showed that Celesio's strategy was paying off.
He noted: "By covering the entire spectrum of the pharmaceuticals market, the company is not dependent on the performance of individual drugs, individual customers and customer groups or individual, national pharmaceuticals markets. Celesio is sure to participate in the growth of the pharmaceuticals market, which will grow in the longterm due to demographic development."
Celesio is divided into three divisions - pharmacies, wholesale and solutions.
Net profit rose 39 per cent to 219.7 million euros. Cash flow increased by 34.5 per cent, reaching 276.8 million euros.
The pharmacies division saw pre-tax profits up 15.2 per cent at 103.2 million euros. That was on revenues up 2.4 per cent to 1.42 billion euros.
The company stated: "In the UK in particular, Lloydspharmacy developed well compared with the difficult trading environment being experienced in UK retail. The number of processed prescriptions showed a further increase."
The division's success was down to "correct strategic positioning, geographical diversification and sustainable cost control".
And the group is looking to expand its number of pharmacies.
It stated: "Celesio purchases pharmacies in existing markets if the location is attractive and the price is reasonable.
"In Ireland, the Netherlands and Belgium, Celesio has still not reached the right size for a pharmacy chain. Celesio will therefore make expansion of the pharmacies' presence in these countries, as well as the UK, the focus of its attention."
The group has 1,911 outlets in seven European countries. In the first half it acquired 32, opened nine and shut 13.
The wholesale division saw pretax profits up 13.3 per cent to 175.4 million euros. Revenues were up 7.3 per cent at 8.3 billion euros.
In particular it did well out of the trend towards generic medicines.
The company stated: "Celesio achieved a strong growth from generic products in the UK, France and Norway. This was primarily due to the expiry of patents for high-turnover medicines and a change in the behaviour of doctors.
"Intensive collaboration with manufacturers enabled Celesio to offer its wholesale customers a wide range of products at attractive conditions, thereby benefiting from the growing market for generic products. The increase in sales of generic products has a positive impact on gross profits.
"However statutory price cuts in the UK had the opposite effect."
Every day, 137 branches in the wholesale sector make more than 100,000 deliveries.
Celesio went on: "The management board is optimistic with regard to the current financial year, and is anticipating sustainable growth in all three business divisions. Growth in the wholesale division is expected to be in line with the comparable market and in the pharmacies division to outperform the market. However price reductions in the UK will curb the growth of the market there and likewise group revenue.
"This will result in a slower growth rate for pre-tax profit in the second half-year compared with the first half-year."