Few pharmacy companies believe they are suffering from
recession
Only 9 per cent of 171 companies studied in the most
recent Plimsoll portfolio analysis of retail pharmacy businesses believe
that they are in recession.
These 16 companies have seen an average sales fall
of 10.3 per cent over the past year and are loss-making.
Just under half (40 per cent) of the 171 companies
are now at high financial risk according to Plimsoll. These companies
tend to be the smaller companies and are lagging behind an otherwise healthy
market.
Current market growth for the sector is 7.6 per
cent and profitability is 4.9 per cent. Annual sales per employee are
around £86,000. Just over half (93) of the companies saw a 9.6 per cent
average growth in sales and do not consider themselves to be in recession.
Their profit margin is 6.3 per cent.
Fourteen companies which said that they were preparing
for the worst in case of a recession, but which did not consider themselves
to be in recession saw their sales decline by 29.4 per cent over the past
year, although profitability was way above the sector average at 27.6
per cent.
Plimsoll says that recession should not be measured
by industries as a whole. “To generalise on company performance seems
outdated and flawed. Recession will be more accurately determined by individual
companies. It is up to individuals as to what stance they have on the
issue and what strategies they will take to ensure survival,” says David
Pattison, one of the company’s financial analysts.
Plimsoll reports are available from Plimsoll (tel
01642 257800) at £305. A 5 per cent discount will be given if The Pharmaceutical
Journal is mentioned when ordering.
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