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2017 was 'busiest year' for pharmacy sales despite clawback and cuts

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Scott Hayton: Hutchings took on 60% more business in 2017 compared with previous years
Scott Hayton: Hutchings took on 60% more business in 2017 compared with previous years

Pharmacy brokers have reported that 2017 was the "busiest year" for pharmacy sales, despite the funding cuts in England and a category M clawback.

Tony Evans, head of pharmacy at brokers Christie & Co, told C+D that last year was the organisation's "busiest to date", with a "31% increase in sales nationally".

He expects "another busy year", as "the funding cuts [in England] and category M clawback, as well as shortages and supply issues, have all squeezed cash-flows".

This has led "many [pharmacy owners] to accelerate their exit plans in recent months", Mr Evans explained.

Christie & Co received "an average of six offers per pharmacy sold" in 2017, he added.

Scott Hayton, director of brokers Hutchings Consultants, said that in 2017 his company "took on about 60% more business compared with previous years", with "no signs of change as we make our way into 2018".

"The market in England has remained surprisingly buoyant despite these [funding] cuts, and the quality of the pharmacies that have been coming to the market has been excellent," Mr Hayton said.

"Many of the independent group owners are seeing this as a rare opportunity to make some key acquisitions," he added.

Growth in Wales and Scotland

Mr Hayton stressed that although the majority of the pharmacy sellers are based in England, there has also been growth in the Welsh and Scottish markets.

This could be because of a "knock-on effect of the various challenges faced by the sector in England", he speculated, as well as "very positive messages" about "the future of pharmacy" by the devolved governments.

Contractors may also be looking to capitalise on the noticeable "growth in demand" for Scottish and Welsh pharmacies located near the English border, he added.

Predictions for 2018

Mr Hayton said he expects pharmacy markets across the UK will "continue to perform strongly" in 2018. But he stressed the rate of pharmacy sellers approaching the market in England will slow down, "perhaps towards the third quarter of 2018".

"Wales and Scotland should continue as highly sought-after locations for pharmacy buyers both domestic and abroad," he said.

Mr Evans said Christie & Co "anticipates that some multiples will look to consolidate their estates, as they continue to try to balance the books".

"We expect that more first-time buyers will look to buy as they continue to face employment pressures."

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4 Comments
Question: 
Have you bought or sold a pharmacy since the funding cuts came into effect?

Ravi Patel, Community pharmacist

"2017 was 'busiest year' for pharmacy sales [because of] clawback and cuts" would be a more accurate and justifiable headline.

Sunny Jim, Pharmacy Buyer

So what you saying Patel...you want immunity from the cuts? 

Ravi Patel, Community pharmacist

Are we both reading the same sentence?

Brian Austen, Senior Management

One person's exit strategy is another person's opportunity. Lets hope that the purchases work out for those that obviously have a more optomistic view of pharmacies future.

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