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Alliance Boots profits rocket as UK dispensing income dips

Business Alliance Boots has seen another year of double-digit growth, with revenue soaring by 18.4 per cent to £23 billion and trading profits up 12.4 per cent, despite the “challenging economic environment” and a drop in UK dispensing income.

Alliance Boots has seen another year of double-digit growth, with revenue soaring 18.4 per cent to £23 billion and trading profits up 12.4 per cent, despite the "challenging economic environment" and a drop in UK dispensing income.

The growth of the international giant was driven in part by its pharmaceutical wholesale division, where revenue rocketed 27.9 per cent, while the health and beauty division saw much lower revenue growth of 0.6 per cent.

But, despite the international success, lower generic reimbursement prices and branded medicines coming off patent meant dispensing and related income at Boots UK fell by 1.6 per cent in the year, despite a growth in dispensing volumes. The multiple said it expected dispensing growth to be limited in the upcoming year.

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Income from pharmacy services remained "relatively modest" in 2011-12, showing a year-on-year increase of approximately 3.5 per cent. Boot pharmacists delivered 760,000 MURs in the year.

"Strong competition" and lower sales of cough and cold remedies led to retail health sales revenue falling by 2.4 per cent, Boots UK reported.

But revenue rose 2 per cent in the beauty and toiletries category, which Boots put down to its "leading market position" and exclusive brands such as No7 and Champneys.

The Boots Advantage Card loyalty scheme continued to perform well, with member numbers increasing by 6 per cent in the year. And Alliance Boots reported that sales of its Almus generics range increased year on year by more than 30 per cent.

Alliance Boots chairman Stefano Pessina said the performance was "encouraging" in the challenging economic conditions. He predicted the economic environment would remain "difficult" in the coming year, but said he was optimistic about Alliance Boots' growth.

"We are confident about our future prospects and ability to pursue profitable growth, both organically and through further international expansion," he said. "This will be supported by our strong operating cash flow and secure funding arrangements, which will enable us to continue to invest while at the same time reducing net borrowings."

Last year, Alliance Boots posted revenue growth of 15 per cent.


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3 Comments

Career Miss Take, Locum pharmacist

Discontent pharmacists,underpaid staff,not honouring Sunday payments,reviewing lunch breaks.Excellent achievement.
Can any of these companies achieve these figures by negotiating decent remuneration for the services offered rather that exploiting staff?
.

shelton magunje, Community pharmacist

Good business BOOTs but does that 28% increase in exports account for some of the drug shortages being experienced in the UK!? Just a thought!

Gerry Diamond, Primary care pharmacist

Well done Boots!

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