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COVID-19 continues to impact Boots finances, with 13.4% profit drop

"Pharmacy sales increased 3.2% due to NHS reimbursement and stronger pharmacy services"
"Pharmacy sales increased 3.2% due to NHS reimbursement and stronger pharmacy services"

Boots’ parent company, Walgreen Boots Alliance, has attributed a 13.4% profit drop to “lower UK retail sales and pharmacy volumes” as a result of COVID-19.

Adjusted gross profits for the international division – which includes Boots UK – dropped by 13.4% for the December-February period, compared to the same quarter a year ago, Walgreens Boots Alliance announced today (March 31).

This was “partially offset by the favourable timing of NHS reimbursement”, Walgreens Boots Alliance said, referring to the £370 million advance payment awarded to pharmacies in England last year for COVID-related costs.

However, adjusted operating income took a big hit in the three months to February because of “strict COVID-19 restrictions in the UK”, it said, falling by 31.8%.

Pharmacy sales up once again

While COVID-19 continued to impact Boots UK’s comparable retail sales – decreasing 17.9% compared to the same quarter a year ago – comparable pharmacy sales in the UK actually increased 3.2% in the same period.

Walgreens Boots Alliance again attributed this to the £370m reimbursement, but also highlighted “stronger pharmacy services, which mitigated the impact of lower prescription volume”, it said.

Last year, Boots announced plans to expand its pharmacy services, including piloting “new private independent prescribing clinics”, and “building upon the success” of its cystitis test and treat service.

Boots.com continued to perform “very strongly”, with sales up 105% compared with the three months to February 2020, which helped to partially offset the reduced footfall to Boots branches, Walgreens Boots Alliance explained.

Overall results “well ahead of expectations”

Overall sales for the quarter across the whole of the company increased 4.6% on a constant currency basis to $32.8 billion (£23.8bn), compared with the same period last year, which recently appointed CEO Rosalind Brewer said was “well ahead of expectations”.

“Overall, we have achieved a good financial quarter with results well ahead of expectations, despite significant impacts from COVID-19,” she said.

“I am optimistic about our ability to drive sustainable, long-term value for our shareholders, while acknowledging that there is still work to be done to stabilise the base business.

“I will continue to review closely all our initiatives, strategies and opportunities to capitalise fully on the incredible potential in front of us,” Ms Brewer added.

In January, Walgreens Boots Alliance announced it had sold has sold the majority share of its wholesaling arm Alliance Healthcare to company AmerisourceBergen for £4.7 billion ($6.5bn).

Walgreens Boots Alliance expects to “close” the sale by the end of this financial year, it said in today’s financial results report.

6 Comments
Question: 
How has your pharmacy coped during the COVID-19 pandemic?

TC PA, Community pharmacist

Was surprised to see they sold/are selling the wholesaler arm. That usually makes up for the poor retail side

sunil maini, Community pharmacist

Maybe Sunak will now pay some attention to our plight,now that BIG PHARMA have said they are struggling like the rest of us?

Dave Downham, Manager

If I was an accountant, I might think it a tad ropey assuming that the £370m reimbursement was for keeps rather than just an advance. Am I mistaken or do boots know something the rest of us don't?

Axed Locum, Locum pharmacist

Your guess is as good as mine. Written off, at the expense of the tax payer. Shame.

Kav Singh, Community pharmacist

Not a chance in hell will the advance be written off. Churchill made that clear only a few weeks ago.

Dave Downham, Manager

Well that's me reassured. If Jo says so, it must be true. Sarcastic face emoji.

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