United Drug has no plans to acquire pharmacies and believes its main rival in the pharmaceutical distribution market, the German group Gehe, has paid too much for the 50-odd pharmacies it has already acquired. Gehe recently bought the Unicare chain of pharmacies for a reported £100 million (€127 million).

United Drug chief executive Mr Liam Fitzgerald said such a move would be inappropriate for the company. "We don't believe it's right for us to compete with our own customers," he said, adding that United Drug had increased its share of the wholesale market since Gehe - which owns Cahill May Roberts - started acquiring pharmacies. He said United Drug had increased its share of the market by two percentage points and that between 15 and 20 pharmacies had moved their business from Gehe's Cahill May Roberts to United Drug. About a quarter of United Drug's shares are held by individual pharmacists. "Gehe has paid substantially more for its Irish pharmacies in terms of multiples of turnover than anywhere else in Europe," said Mr Fitzgerald.

He was speaking as United Drug reported an excellent set of results for the year to the end of September. Pre-tax profits were 25 per cent higher at €23.3 million while sales rose 17 per cent to just over €1 billion with the dividend increased by 20 per cent to 21.9 cents per share.

All divisions performed well, with wholesale distribution in Ireland accounting for 45 per cent of profits, contract distribution 40 per cent with the remaining 15 per cent coming from the contract sales outsourcing business. Mr Fitzgerald said United Drug intended to extend its contract sales outsourcing business into Europe and would look at acquisitions in France, Germany and the Benelux countries.