Well Pharmacy reveals £29m loss in 2023 amid ‘significant challenges’
New financial documents from the multiple have revealed that profits dipped by £33 million between 2022 and 2023.
Bestway Group – Well Pharmacy’s parent company – this week (April 2) published its full annual accounts up to June 30 on Companies House, under the name “Bestway National Chemists”.
The financial documents reveal that the pharmacy chain made a loss of £29,157,000 after tax in the 2023 financial year.
Last year, C+D reported that Well Pharmacy posted annual profits of £4.14m in the financial year 2022, meaning the 2023 results reflect a £33.3m year-on-year drop in profits for the company.
The report also highlighted that during the financial year, the company “acquired three smaller pharmacy businesses” - equating to “an additional four pharmacy locations” - and purchased “a further two pharmacies”.
It added that “the directors took the decision to dispose of seven pharmacies in connection with the acquisition of the Lexon group”, meaning that Well operated a total of “782 pharmacies at the end of the year”.
This was down from 742 in 2022, it said.
“Ongoing funding challenges”
Reflecting on the loss, Well’s directors admitted that 2023 “was a challenging year for the business”.
“The company experienced significant challenges due to changes within the flat funding contract”, they said.
The directors pointed to “a series of changes…made at short notice” – including the “prior year funding over-delivery” clawback – and “wage pressure” from an increase in the national living wage.
They added that “inflationary pressures on global supply chains” led Well to “absorb the increases” in generics prices until the drug tariff caught up.
“This was particularly prevalent in the first nine months of the fiscal year,” they said.
“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,” they added.
"Intentionally and systematically squeezed”
Well chief executive Seb Hobbs told C+D today (April 4) that the financial results “reflect the incredible work of our committed teams in serving communities and independent pharmacies”.
He said that he was “pleased to see” Well’s “growth strategy deliver as revenue increases in Well Pharmacy, Medhub and through the acquisition of Lexon and Norchem”.
But he added that the results “also show the increasing financial pressures faced by community pharmacy, particularly in England”.
“The sector in England has been intentionally and systematically squeezed over recent years to the point we are seeing contractors exit either by sale or an administration event,” Hobbs told C+D.
A struggling sector
Last month, C+D reported that independent multiple pharmacy business Weldricks posted a £1.4m loss after tax in the last financial year – up from £893,000 in 2022.
At the time, operations director David Vanns told C+D that its 2023 losses were caused by inflation “running ahead of the rate” that the pharmacy was getting paid.
In the same month, financial documents from pharmacy chain Paydens revealed its earnings before interest, taxes, depreciation and amortization (EBITDA) dropped from £3.13m in 2022 to £31,600 in 2023.
Paydens Pharmacy managing director Alexander Pay said the sudden EBITDA drop shows “the challenging picture of the business”.
Meanwhile, the pharmacy negotiator has written to the chair of the health and social care committee (HSCC) outlining its concerns about comments made by the pharmacy minister that the sector is “thriving”.
