OPERATING PROFITS at independent pharmacy chain, Sam McCauley chemists, grew 45 per cent to €7.5 million last year, the company’s latest figures show.

The group, which owns a chain of chemist shops around the southeast, south and south west of the country, had sales of €84.76 million in its last financial year, which ended on September 30th last year.

While revenues were less than 1 per cent short of those earned in its 2008 financial year, operating profits increased by 45 per cent to €7.5 million from €5.2 million, largely due to a €2 million-plus fall in costs.

The group employed 40 fewer people in 2009, 564 from 605, and saved more than €600,000 in wages and social insurance costs.

Its figures, recently filed with the Companies Registration Office, show that a reduction in the value of its properties resulted in a charge of almost €4 million to its profit and loss account.

As a result, its pretax profits were €2.2 million last year, 35 per cent less than the €3.44 million surplus that the company recorded in 2008.

The accounts show that the group owed its banks a total of €29 million, made up of both short and long-term debt.

Net assets were €26.7 million on its balance-sheet date, September 30th, 2009, down from €32.5 million 12 months earlier. The change was largely due to the write down in the value of its properties.

The directors did not recommend paying shareholders a dividend at the end of last year. The previous year the company paid its owners – largely comprising the McCauley family – just over €1.5 million.

Sam McCauley chemists was recently involved in arbitration proceedings with a smaller rival, the Adrian Dunne group, after a €50 million deal between the pair went sour.

Three years ago, the McCauley group approached the Dunne business to discuss a takeover valued at about €50 million.

Following due diligence, the initiative did not go ahead, and the matter went to formal arbitration proceedings in late June.

These proceedings are held behind closed doors and it is not known if the dispute has since been resolved. Many companies favour arbitration to settle disputes as it means that they can avoid airing commercially sensitive or normally confidential information in open court.

Businessman Adrian Dunne owns the Dunne group through a holding company, DM Pharmacies. It has outlets in a number of locations in Dublin, Meath, Wicklow and two in Portarlington, Co Laois. The locations were thought to be attractive to the McCauley group, as it has no presence in these areas.