Boots hit with £111m post-tax losses in 2020/21, report reveals
Boots reported a £111 million post-tax loss for the financial year ending August 2021, despite its Boots.com sales more than doubling in the same period , its most recent financial statements have revealed.
However, its 2020/21 post-tax loss represents a £147m (57%) “improvement” on its 2019/2020 losses, which stood at £258m, according to documents filed with Companies House yesterday (August 25).
While Boots’ online segment “continued to perform above expectations” in 2020/21, registering a 54% growth, the company’s in-store sales continued to be affected during this period, which the multiple put down to reduced footfall due to COVID-19 restrictions.
When footfall recovered following the lifting of restrictions, retail sales began to go up and pharmacy sales “strengthened primarily as a result of an increase in COVID-19 testing and vaccinations”, the report said.
Boots’ pharmacy sales accounted for 39.3% of its revenue in 2021, compared to 38.7% in 2020.
As with 2020, Boots benefited from business rates relief last year, resulting in a £112m reduction in rates.
Boots spent £62m on “one-off” restructuring costs for its branches between July 2020 and August 2021, which year on year have saved the company £94m, it estimated.It referred to its 2019 decision to shutter 200 of its branches, most of which it closed in 2020.
Boots still wary of pandemic’s impact
COVID-19’s “significant volatility, uncertainty, and disruption […] continued into the current financial year”, Boots wrote.
The multiple retains “some uncertainty” regarding the “material impact” of COVID-19 on its future financial position.
Taking into account “supply chain risks”, Boots has “increased its purchases among many key categories to mitigate any potential sourcing delays”, it said.
Despite announcing it planned to sell Boots in December 2021, the multiple's parent company Walgreens Boots Alliance called off the auction for the UK pharmacy chain in June after no prospective buyers were able to make an offer “that adequately reflects [their] high potential value”.
In its most recent financial results conference call, Walgreens Boots Alliance said it would continue to “stay open to all opportunities [for Boots] to maximise shareholder value”.
A Boots spokesperson told C+D that multiple's “true performance” for the 2020/2021 financial year “must take in to account the three main Boots UK entities – Boots UK, Boots Company and Boots Management Services – with operating profit reconciled on an underlying basis”.
“Boots’ total underlying operating profit [in 2021] was £262.5 million, versus £131 million in 2020,” they said.
