Alliance Boots hails another year of strong growth
Business Alliance Boots has missed out on a sixth year of double-digit trading profit growth, but executive chairman Stefano Pessina said a 6.1 per cent rise to £1.3bn reflected "particularly good" results in the UK
Alliance Boots has missed out on a sixth year of double-digit trading profit growth for 2012-13, but hailed its 6.1 per cent increase to £1.3 billion as a strong performance in a challenging market.
Although the health and beauty giant failed to match last year's profit growth of 12.4 per cent, Alliance Boots executive chairman Stefano Pessina said the year had yielded "particularly good" results in the UK, at the presentation of its annual results today (May 15).
Boots' UK health and beauty division posted profit growth of 8.8 per cent to £813 million, which it attributed to a strong retail offering, effective management and tight cost controls.
Alliance Boots chair Stefano Pessina said the year had yielded "particularly good" results in the UK |
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Mr Pessina said: "We continue to be confident about our prospects and ability to pursue profitable growth... our transformational partnerships put us in a unique position to become the clear world leader in both pharmacy and pharmaceutical wholesale." |
But UK dispensing revenues took a 7.3 per cent hit, falling to £2.2bn, which Boots put down to increasing reimbursement pressures and branded medicines coming off patent.
Alliance Boots also claimed walk-in prescriptions had been hit by the number of 100-hour pharmacies that had opened under the entry exemption in England. It expected openings to slow after the removal of the exemption last year.
The health and beauty giant enjoyed increased dispensing volumes in Scotland and Northern Ireland, where the 100-hour exemption had not been brought in. However, profitability in these countries had still been hit by the lower reimbursement prices for generics, it said.
Revenue rose 1.2 per cent to £2.2bn in its beauty and toiletries category, which Boots put down to strong sales of its exclusive brands such as No.7 and Smashbox cosmetics.
Last year, Alliance Boots reported that revenue from its pharmaceutical wholesale division rocketed 27.9 per cent, while its health and beauty division experienced much lower growth of 0.6 per cent.
Mr Pessina said the health and beauty giant's partnership with Walgreens and the recent joint agreement with US wholesaler AmerisourceBergen meant he was confident about the company's prospects.
Overall, Mr Pessina said 2012-13 had marked a "transformational year" for the company due to its £4.27bn deal with Walgreens in June. He said the merger had already created £14m in cost savings before tax, and was confident it would yield further benefits in future.
"In five years' time, I believe the shape of our industry will be different, with our merged companies being the undisputed market leader and expanding into Asia and Latin America," Mr Pessina forecast. "The past five years have been the most exciting and stimulating of my career, and I'm confident the next five years will be more exciting still."
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