Drug group Celesio, formerly Gehe, reported a 16.6 per cent drop in turnover to €150.8 million at Irish wholesale business Cahill May Roberts (CMR) in the first half of 2003, compared with the same period last year.

However, revenues at its 53 retail outlets in the Republic almost tripled to €50.3 million.

The company, with its headquarters in Stuttgart, Germany, said it had completed a programme of rationalisation that saw CMR plants in Dublin and Cork extensively modernised in the first six months of 2003.

Plans to rebrand its retail chain under the Unicare badge are on course and will be finished by year-end.

Celesio has aggressively sought to establish itself as a player in the retail pharmacy sector, a move which some in the industry claim has harmed its wholesale business with rivals reluctant to deal with the group.

It reinforced its determination on the high street with the acquisition last November of the Ryan pharmacy chain in Limerick

Overall, group turnover was €9 billion for the first six months, up 3.8 per cent on the same period last year. Pre-tax profits climbed 10.9 per cent to €167.2 million while returns on sales rose from 1.72 per cent to 1.85 per cent. Net profit rose 8.1 per cent to €113.3 million. An equity ratio of 30.5 per cent was reported, while gearing was 0.76.

Turnover growth of 4 per cent and a 10 per cent rise in pre-tax profit are predicted for the full year.

Dr Fritz Oesterle, Celesio board chairman, said: "The pleasing results achieved in a very difficult environment. . . confirm our strategy of regional diversification. We were able to more than compensate substantial negative effects, for example, arising from Germany, thanks to strong profit development in other sections."