The pharmacy industry is facing a major inflation challenge and a shortage of pharmacists, warned Sam McCauley pharmacy chain chairman James Tolan.
He has also said that the state must address its relationship with the sector, otherwise the number of pharmacies threatens to dwindle.
His warnings come as the chain is circled by Irish listed group Uniphar in a likely takeover move.
Newly filed accounts for the Sam McCauley business show they continued to make losses in the past fiscal year.
It posted a pre-tax loss of €1.6 million in the 12 months to the end of September last year, compared to a loss of €3.1 million the year before.
“The pharmacy retail industry is currently facing very significant inflation challenges and a growing shortage of pharmacists,” said Mr Tolan in just-filed bills for the Sam McCauley chain, signed last month.
“The pharmacy retail industry is unique in that it is the only healthcare provider that has not seen an increase in the rates it provides services on behalf of the state in more than 10 years,” he added.
“If the state continues to take a non-strategic approach to its relationship with the pharmacy retail sector, over time there will be fewer pharmacies and shorter opening hours,” said Mr. Tolan.
Despite an operating loss of €346,000 reported by the Sam McCauley chain in the 12 months to the end of September last year, earnings before interest, taxes, depreciation and amortization (EBITDA) for the period were €4.5 million. That was more than the €4 million that directors had expected to generate.
Sam McCauley is the third largest pharmacy chain in Ireland, with 37 outlets across the country. Sam McCauley joined the family group in 1978 and expanded it over the following years. In 2017, investment group Cardinal Carlyle Ireland took a majority stake in the company for more than €50 million.
Shareholders injected €3 million of fresh capital into the drugstore in the 2020 financial year.
The Sunday Independent reported last weekend that the listed Uniphar is approaching a takeover of the chain. The newspaper said Uniphar has prevented competition from Dunnes Stores and SuperValu owner Musgrave from taking pole position in sales talks.
The industry remains challenged after the pandemic, when the Sam McCauley chain cut 100 jobs.
Bills filed this week for the Sam McCauley business show sales for the year to the end of September declined 3 percent to $80.4 million. The gross margin increased by 1.3 percentage points to 40 percent.
“Given the circumstances of the Covid-19 pandemic on the global economy and Ireland in particular, directors are pleased with the company’s performance throughout the year,” the accounts said.
They stressed that the chain is “well positioned” to cope with the ongoing microeconomic challenges.
Mr. Tolan said in the accounts that the company had continued to invest in its stores, further acquisitions and in its online offering.