Alliance Boots post higher profits
UK retailer and drugs wholesaler Alliance Boots today posted strong growth in annual sales and profits, despite a tough time for baby products and photography.
Sales rose by 15% to £20.2bn (€23.15bn) in the year to March 31 with underlying profits up by 14% to £1.05bn (€1.2bn), though most of the gains came from the pharmaceutical distribution side, where profits jumped by more a third to £320m (€366m).
Boots UK had a more difficult time as like-for-like revenues rose by 0.5%. Cosmetics sales dipped and lifestyle, which includes photography, also saw sales fall slightly. Higher volumes offset lower prescription charges to lift dispensing revenues by 2.4%.
The UK was still the best performer in the health and beauty division overall, with all other countries seeing lower like-for like sales. Trading profits were 5.5% higher at £767m (€879m).
Acquisitions boosted the pharmaceutical division’s contribution as growth in both sales and profits was 1.7% on an underlying basis, though UK sales rose by more than 5% despite more direct sales to chemists slowing its progress.
The company, which was taken private in an £11.1bn (€12.7bn) takeover in 2007, last year became the third UK retailer to post profits of more than £1bn (€1.14bn) behind Tesco and Marks & Spencer.
The group employs around 75,000 staff in the UK, with 2,500 health and beauty stores and 670 opticians. In October, it announced it was cutting more than 900 non-store UK jobs over the next three years.
Executive chairman Stefano Pessina, who led the buyout of the business with private equity firm KKR, cautioned that the pressures seen over the past 12 months were expected to continue.
“We are planning for consumer demand to be subdued and expect governments to continue to seek ways to contain growth in healthcare expenditure,” he said.
