Profits in the European business declined by 50 per cent in the three months to June, McKesson, the parent company of LloydsPharmacy, reported in its financial results for the quarter.
The company attributed “weak retail pharmacy environment in the UK” for the slump.
On an FX-adjusted basis, adjusted operating profit was $37 million (£30.46 million), which represented a decline of 50 per cent year on year.
The latest results show a continued decline in the UK business, as the company experienced a 36 percent decline in profits for the European business in the 2018-19 fiscal.
McKesson UK has last month announced that it will not be paying annual bonus this time, citing the challenging financial year it had in 2019.
The revenues at the European business stood at $6.7 billion, down 3 per cent on a reported basis and up 3 per cent on a FX-adjusted basis in the first quarter of the current fiscal.
This was driven primarily by market growth in the pharmaceutical distribution business, the company said.
The Texas-based firm reported strong revenue growth globally and raised earnings guidance.
The revenue stood at $55.7 billion in the first quarter, compared to $52.6 billion a year ago – an increase of 6 per cent on a reported basis and an increase of 7 per cent on an FX-adjusted basis.
“McKesson is off to a strong start in fiscal 2020, and our first-quarter earnings performance exceeded our expectations,” said Brian Tyler, chief executive officer.
“Based on the momentum from our first-quarter results and our confidence in the full year outlook, we are raising our previous guidance range for fiscal 2020 and now expect adjusted earnings per diluted share of $14.00 to $14.60.”