Avicenna Retail’s financial statements for the year ending July 2024 have said sales remained stable between 2023 and 2024.
According to accounts published on Companies House last week (July 30), sales at the community pharmacy chain were “broadly in line with last year”.
Revenue increased by 0.9%, rising from £168.3m in 2023 to £169.7m in 2024.
Accounts also revealed the company anticipated “further disposals” of stores and “head office cost-saving initiatives” throughout 2025.
Read more: Knights boosts pharmacy footprint by 50% with Avicenna acquisitions
Avicenna’s pre-tax profit rocketed from a loss of £123,398 in 2023 to a profit of over £7.9m in 2024 – rising by over £8m.
It told C+D today (August 5) that this drastic rise was due to “two main items: gains on disposals of stores” and a “one-off cost for historic clawbacks in the 2022/2023 financial year”.
It added that “over the last few months, a number of store disposals have been made” with the rationalisation strategy expected to continue as the company considers what its “optimal store portfolio for the future” will look like.
Restructuring
The expectation is that this will be “around 25 stores” which are “likely to be in England” and are anticipated to be complete by “the end of 2025”, it told C+D.
Avicenna is “actively working through this restructuring process, which includes both store disposals and the right-sizing of our support centre for a reduced estate”, it added.
It stressed that Avicenna pharmacies remain a “priority” with the company continuing to “support staff and serve patients”.
Read more: Knights snaps up Avicenna pharmacies with HSBC cash boost
“We look forward to supporting the pharmacy sector, albeit with a small estate, following this restructure,” the company said.
“Avicenna has not been immune to the fixed funding community pharmacy contract over the last six years. While the increased funding from NHSE was welcome, there is still further to go to ensure community pharmacy is on a secure financial footing and able to support government plans to improve primary care,” it added.
The company’s financial statements echoed this message, stating that “economic conditions” and “the wider NHS pressures in the industry” pose a challenge.
Significant competition
Further changes to drug tariffs could also “adversely impact the company’s profitability”, it warned.
The document added that Avicenna “faces significant competition from both other local independent pharmacies and large national chains”, a risk which is “mitigated by monitoring and defending [its] position, as well as by providing excellent service to [its] customers”.
All of these circumstances “indicate the existence of a material uncertainty that may cast significant doubt upon the group’s and the company’s ability to continue”, it said.
Read more: Avicenna pharmacies ‘feel the squeeze’ amid branch disposal plans
Meanwhile, Avicenna Limited – of which Avicenna Retail is a subsidiary – also released its financial statements for the year ending July 2024 last week (July 30).
These revealed that its loss before taxation was reduced by 8%, going from a loss of £12.5m in 2023 to a loss of £11.4m in 2024.
Read more: Avicenna Membership Services sold to Dutch buying group
It comes after it was revealed last week (July 29) that Knights Pharmacy will expand its premises numbers by around 50% thanks to its acquisition of 24 pharmacy branches from Avicenna Retail.
And Avicenna announced in May that its buying group arm – Avicenna Membership Services – had “split from its retail pharmacy operation” and been acquired by Dutch business Nafinco.
