Alliance Boots, created from the merger of chemist chain Boots and drugs wholesaler Alliance Unichem in July, said on Thursday that trading and its integration were both going to plan.
The firm, which runs about 3,000 pharmacies and fills about one in five European prescriptions, also said it had won a contract with Pfizer Inc, the world's biggest drugmaker, to be its sole UK distributor of prescription medicines.
Bernstein Research analyst Luca Solca said he was encouraged by the win, but the good news was offset by other developments, such as Alliance Boots' warning that the French government was looking to cut back on healthcare spending in the second half.
Overall, it's a pretty balanced statement, he said, keeping an outperform rating on Alliance Boots shares.
The firm said its retail business had maintained good sales growth since its previous trading update, when it said like for like sales at the Boots the Chemist chain rose 3 percent in the three months to June 30.
It did not provide an updated sales figure.
Alliance Boots, which has cut prices and revamped stores to fight stiff competition from supermarkets, said its chemists were benefiting from increased membership of the Boots Health Club, as well as strong sales of cosmetics and fragrances.
The wholesale businesses had also continued to perform well overall, Alliance Boots said in a trading statement.
In July, the firm trimmed its forecast for 2006 wholesale market growth to 2 percent from 2.5 percent as governments look to bear down on rising healthcare costs.
Since the merger was completed on July 31, trading has continued in line with our expectations, Chief Executive Richard Baker said in the statement.
The integration programme is proceeding to plan and the group is in good shape going forward.
Alliance Boots is aiming to achieve 100 million pounds of annualised cost savings after four years, with about 60 million achieved after two.
Its shares are trading at 15 times 2007 earnings, cheaper than the 16.2 times for the DJ Stoxx European retail index. At 08:25 GMT (9:25 a.m. British time), the stock was down 0.5 percent at 775 1/2 pence, valuing the business at about 7.5 billion pounds.