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UPDATED: Boots reports 60% profit spike as sales surge

The multiple’s latest annual report has revealed that an increase of both pharmacy and retail sales drove profits over the last financial year amid ongoing rumours that its parent company is looking to sell the health and beauty giant.  

Published yesterday (May 28), Boots UK Limited’s annual report and financial statement revealed that the company made an operating profit of £88 million for the year ending August 31 2023.

The report said that this was an increase of 60% from 2022, when operating profit sat at £55m. 

It said pre-tax profits rose from £4m to £60m.

It also said it saw an 8.3% increase in overall sales, which jumped from £6,512m in 2022 to £7,053m in 2023.

Boots said that the revenue was “impacted by government agencies seeking to minimise increases in the costs of healthcare, including pharmaceutical drug reimbursement rates”.

 

Pharmacy sales up 

 

The document also revealed that pharmacy revenue “increased by 1.3%” to £2,337m in 2023.

It added that this “represented 33.1% of the company’s revenue”, down from 35.4% the previous year despite the peak in pharmacy sales.

Meanwhile, retail sales jumped by 12.2% and represented 66.9% of all company revenue in 2023, it said. 

The report added that increased pharmacy revenue was because “favourable NHS drug reimbursement rates mitigated the impact of ongoing lower prescription volume and reduced demand for services such as COVID-19 and flu vaccinations”.

 

Changes to Boots “store portfolio”

 

The annual report also revealed that during 2023, Boots incurred £38m in “one-off” restructuring costs “associated with changes in the company’s store portfolio alongside store and central support operating models”.

In June, the multiple revealed plans to close 300 branches across England “over the next year”.

In this latest report for the year ending in August, Boots said that “continuing the reorganisation programme in-year resulted in 55 store closures, taking the total programme to 290 store closures to date”.

Read more: Thousands of Boots pharmacists to be offered dermatology training

It added that “during the year”, Boots decided “to accelerate the store portfolio consolidation by a further 300 stores over the course of the next financial year”.
 
It remains unclear whether these 55 store closures were part of the announced 300, and from when the 290 closures were recorded.
 
The report also said that on August 1, Boots “acquired the shares in Lemonaid Health Limited, a company providing online doctor related services” for a “total transaction value” of £1.  

 

Sales rumours

 

Meanwhile, this month Bloomberg reported that Boots’ parent company Walgreens Boots Alliance (WBA) was making new efforts to sell the chain despite it previously deciding against selling in June 2022.

It said that WBA is “working with advisers to hold early-stage discussions with would-be bidders”.

C+D approached Boots for comment.

Read more: ‘Counter culture’: Boots launches exhibition to celebrate 175th birthday

In 2022, Asda’s Issa brothers and private equity firm TDR were rumoured to be bidders for the health and beauty giant.
 
In January this year, WBA chief executive Tim Wentworth said that WBA would act “with everything on the table in terms of putting our business on the right tracks”.
 
At the time, when asked by C+D whether this includes selling or floating Boots UK, WBA declined to clarify.

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