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Boots reports 2% pharmacy sales growth amid renewed sale rumours

Boots has reported 2% pharmacy sales growth for the last quarter, amid rumours that its parent company is once again looking to sell the business.

The multiple yesterday (March 28) reported its results for the second quarter of the financial year, representing the three months to February 28.

 

It revealed that pharmacy sales were up 2% compared to the same quarter last year “despite [the] challenging sector backdrop”, while sales of cough and cold treatments rose 84% year on year.

 

Read more: Boots unveils plans to pilot private diabetes screening service

 

Pharmacy sales were “held back by lower demand for COVID-19 services”, Boots’ parent company Walgreens Boots Alliance (WBA) said.

 

The multiple also delivered more than 1.62 million flu vaccinations this season, with over 175,000 in the second quarter alone, Boots said.

 

Read more: Boots growth ‘offset’ by fixed pharmacy funding deal, parent company says

 

Boots has doubled the number of healthcare services it offers over past three years to 125 and now provides 15 “dedicated women’s healthcare services including Boots Online Doctor Menopause and hormone replacement therapy (HRT) Treatment”, it added.

 

This comes amid reports that WBA plans to sell or float Boots by the end of the year – just months after a previous sale attempt fell through.


 

“Strong retail sales”

 

 

Boots also reported “strong retail sales” for the quarter, with sales up 16% year on year driven by a “record-breaking” beauty performance and “strong Christmas trading”.

 

Footfall rose by 16% alongside an “increase in total item sales”, delivering the multiple’s “eighth consecutive quarter of market share growth”, it said.

 

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

And its parent company WBA yesterday reported net earnings of $703 million in the second quarter – down from $883 in the same quarter last year.

 

“Challenging environment”

 

WBA chief executive Rosalind Brewer said the company “exited a solid second quarter with acceleration in February, adding to our confidence in driving strong growth in the second half of the year”. 

Read more: Boots UK: ‘Realistic’ recession risk plan in place, US owner says


“Both Walgreens and Boots are performing well by delivering compelling value to consumers, playing a critical role as community health destinations, and successfully navigating a challenging environment,” she added.

WBA “will continue to take bold actions to create sustainable long-term shareholder value”, she said.


Sale rumours



Meanwhile, financial website This is Money reported on Saturday (March 25) that Boots UK could be “sold or floated by the end of the year”.


It claimed that Boots’ WBA bosses have been “put under huge pressure to break up the global pharmacy giant” by investors and board members.


Read more: Boots UK parent company ‘open to opportunities' after sale called off

Investors are pushing WBA executive chairman Stefano Pessina and Ms Brewer to “speed up plans to refocus the business on the US”, it said.


This involves moving second-largest US pharmacy chain Walgreens “away from traditional retail” to “[focus] more on US private healthcare”, according to This is Money.


Read more: Boots UK: Parent company decides against selling pharmacy chain

It claimed that investors view Boots and other operations in Europe “as a distraction” and want Walgreens to “separate off its international businesses as soon as possible”.


Mr Pessina, who oversaw the merger between Boots Alliance and Walgreens, is “understood to still support splitting up the business but is thought to be less eager to rush”, This is Money reported.


And it claimed that a stock market listing “could also be on the cards”.



Boots: No comment



Boots declined to comment, but C+D understands that the company's position has not changed since the summer.


During its last financial results announcement in January, WBA said that Boots’ growth in the last quarter “was more than offset” by the “adverse impact” of static NHS pharmacy funding, reporting a 0.9% decline in pharmacy sales compared to the first quarter of 2022.

And in October, WBA revealed it had had “a robust discussion” with Boots about the possibility of a UK recession and had put plans in place for such a scenario.

Read more: Boots UK sale: speculation and potential market impact – where are we now?

It comes as the company confirmed in January 2022 that it was looking for potential buyers for its UK arm, with a rumoured price tag of £7bn.

However, the sale eventually fell through in June last year after no prospective buyers were able to make an offer “that adequately reflect[ed] the high potential value” of Boots UK.

There has been no indication of a target sale price for any new sale attempt.

In July, WBA announced that it would continue to “stay open to all opportunities to maximise shareholder value”.

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