Sales up profits down at Phoenix Healthcare
DRUG and surgical equipment supplier Phoenix Healthcare Distribution saw profits fall last year, despite growing sales by £13.2m to £962.3m.
The acquisition of Scottish firm Munro in 2008 for £3.7m added £14.6m to sales, while goodwill impairment related to the purchase hit the bottom line.
The Runcorn-based company, a subsidiary of Germany’s Phoenix Pharmahandel, also saw a £3m hike in distribution costs to £29.2m in the year to January 31 2009 as profits fell by £1m to £25.2m.
Phoenix, which supplies clinics, high street pharmacies, hospitals and medical centres wiith drugs and surgical equipment, added 100 jobs during the year as its workforce rose to 1,276 from 1,175.
Operating profits fell from £34.1m to £32.7m in the year, which saw the company linked with a takeover by US buyout house KKR – the owner of Boots.
Looking forward Phoenix said it was continuing to monitor changes to the pharmaceutical wholesale market amid a trend for manufacturers chosing to adopt a “Direct to Pharmacy” distribution model.
It said: “One of the key issues the pharmaceutical industry continues to face is the changing business model implemented by manufacturers, whereby manufacturers are entering into contracts for certain select wholesalers to deliver product on their behalf to pharmacies for a fee per pack of product delivered.”
Phoenix makes its opposition to Direct to Pharmacy deals clear, stating: “This reduces the wholesalers’ ability to compete with competitors on the basis of sevice and discounts offered to customers, and it also reduces customer choice.”
