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Well Pharmacy reports 15% dip in profits amid rising locum costs

Well Pharmacy last year reported an almost 15% decrease in profits, its latest financial reports have revealed.

Bestway Group – Well Pharmacy’s parent company – this month (March 16) published its full annual accounts up to June 30 on Companies House, under the name “Bestway National Chemists”.

The annual report and financial statements reported annual profits of £4.14m in the financial year 2022 compared with annual profits of £4.86m the year before – a difference of 14.8%.

Well Pharmacy is the UK’s largest independent retail pharmacy chain with around 745 branches and around 6,000 employees, according to Bestway.

 

COVID impact

 

The documents detailed reasons for the decrease in profits, saying that “the year delivered lower revenue compared to the prior year with [over-the-counter sales] and pharmacy service being impacted by COVID”.

This was “partially offset” by the delivery of COVID vaccinations and distribution of COVID tests, the documents added.

Read more: Stress levels and pay rises in 2022 at Boots, Lloydspharmacy and Well

They cited a pandemic “shift in people’s habits on how they seek prescription dispensing and doctors’ prescribing lengths”, as well as “decreased footfall”.

The documents also highlighted the “retention of a flat funded position by the NHS” for the last two years of the pharmacy contracts.

This “continues to present a key risk to community pharmacies, especially when combined with wider inflationary pressures and the healthcare workforce challenges”, they added.

 

Locum costs

 

And the report said that the “lower revenue” was “further impacted by increasing payroll costs, especially those associated with locum pharmacists”.

“Ongoing” workforce availability issues in the sector “can be seen in both access to appropriately qualified personnel as well as the cost impacts of engaging self-employed locum pharmacists”, it added.

Read more: Back to the future: Are locum rates really higher than they've ever been?

“The company continues to work hard to minimise these impacts, both financially and operationally”, it said.

Despite these concerns, the report showed that directors’ remuneration increased from £992,000 in 2021 to £1.1m last year.

But staff costs as a whole – including director’s remuneration – fell from £145.9m in 2021 to £145.7m last year.

 

Aim to improve “scale” of network

 

According to the documents, the company’s “strategic intent” is to “improve the quality and scale” of its pharmacy network “where reasonable value exists”.

“In [the financial year 2022], we sold a number of our smaller pharmacies and acquired some new ones to achieve this objective”, they said.

Read more: Lloydspharmacy reports £66m loss despite efforts to ‘optimise estate’

They added that the company operated 742 pharmacies at the end of the year, compared with 740 in 2021.

 “Despite the ongoing funding challenges facing pharmacies, we continue to invest in our sector showing our commitment to pharmacy and offering accessible healthcare services to local communities,” the report concluded.

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