Cuts and ‘competitive pressures’ behind 72% Lloydspharmacy profit drop
Lloydspharmacy’s parent company has cited the funding cuts and “competitive pressures” in the UK as two reasons for a 72% drop in profits across its European business.
Adjusted operating profit for McKesson’s European pharmaceutical solutions division – which includes Lloydspharmacy – in the first three months of 2019 was $23 million (£17.7m), a 72% drop on the same period the previous year, it said in its latest financial report published this afternoon (May 8).
Revenue for this part of the business was up 2%, once currency rates were taken into account. While this increase had been “driven primarily by market growth”, it was “partially offset” by Lloydspharmacy’s decision to sell or close around 200 branches in England in 2018, as well as a “challenging market environment in the UK”.
C+D has previously identified 78 of the branches Lloydspharmacy closed in 2017-18, and another 104 that it sold.
Looking back over the past financial year, McKesson noted that adjusted operating profit for its European business was down 36% to $219m (£168m).
However, McKesson said it expects to see “modest improvement” in the UK business in 2020.
McKesson CEO Brian Tyler said the business had “successfully executed in a challenging environment and took action to address the headwinds in our European business”.
The latest results from McKesson come a month after Boots parent company Walgreens Boots Alliance said it was taking “immediate action” to address financial results “much weaker than expected”, which will include “decisive action” in the UK.