Pharmaceutical shares dive

Shares in Australian Pharmaceutical Industries have plunged after the operator of Priceline pharmacies and health and beauty stores lowered its profit growth forecast.

SHARES in Australian Pharmaceutical Industries have plunged after the operator of Priceline pharmacies and health and beauty stores lowered its profit growth forecast because customers have been spending less.

API shares dropped 23 cents, or 13.1 per cent, to $1.53, their lowest level since October 2015.

The company, which also distributes drugs, on Wednesday said it expects net profit for the 2016/17 financial year to be about 5 per cent higher than in the prior year, down from its previous forecast of an increase of at least 10 per cent.

Chief executive Richard Vincent said the number of transactions in the company’s retail network had grown and new store openings were on track, however, consumers were spending less per shop and were buying lower value items.

“We are experiencing similar consumer sentiment as reported by other retailers over recent weeks,” Mr Vincent said.

“Despite conditions in the second half being challenging, we are holding our share of the available market and have significant new product launches to help stimulate demand in coming months.”

API said its drug distribution business was on track to meet expectations for the year.