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Lloyds attributes 2019/20 fallen turnover on its ‘portfolio reduction’

Lloydspharmacy’s turnover in 2019/20 was down on the previous year, which the multiple has “largely” attributed to the reduction in the number of its branches in England.

Turnover for the year up to March 2020 was £1.95 billion, 1.6% down on the 2018/19 figure of £1.98bn, the multiple said in its financial reports for 2019/20, uploaded to Companies House last week (June 23).

The multiple saw “some loss of market share” following its decision to “rationalise” its branch portfolio, it reported.

However, Lloydspharmacy said its results also reflect “reductions in government reimbursement, the ongoing impact of the company’s multi-year transformation initiative and impairments of certain of our investments”.

The government’s reductions in pharmacy reimbursement or remuneration have contributed to increasing competition, the multiple added. Lloydspharmacy has to “strive even harder” to retain its customers, especially in light of “aggressive targeting of patients by competitors, including mail order pharmacies”.

Multiple’s work during the pandemic

A spokesperson for McKesson UK – Lloydspharmacy’s parent company – told C+D today (June 28) that the accounts relate to a pre-COVID-19 period.

However, during the pandemic, “Lloydspharmacy has continued to innovate as we evolve towards a scaled omnichannel pharmacy approach”, the spokesperson added.

Offering patients and customers a choice to interact with the multiple “in a way that is convenient for them… positions Lloydspharmacy to be at the forefront of community healthcare throughout the UK, caring for over nine million patients and customers every year”, the spokesperson said.

Last August, McKesson reported a 300% revenue rise for its prescription management app Echo, compared to before the outbreak of COVID-19.

However, while the multiple “strives to change to deliver more efficiency and higher-value services for our patients”, it also “relies on more tangible support from landlords and suppliers, and importantly a more sustainable government funding model”, the spokesperson told C+D today.

In November last year, Lloydspharmacy announced it had closed 99 branches in the previous 12 months, and that it was seeking a 25% rent reduction for nearly a quarter of its sites in England, for which NHS Property Services (NHSPS) is the landlord.

NHSPS told C+D in March that it was conducting a “full review” of the sites Lloydspharmacy leases from the organisation.

What do you make of Lloydspharmacy's financial accounts for 2019/20?

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