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Medipharmacy Limited puts its 16 branches up for sale

Exclusive
Christie & Co expects the sale to generate “significant interest”
Christie & Co expects the sale to generate “significant interest”

Medipharmacy Limited has put its 16 privately-owned branches up for sale today, C+D can exclusively reveal.

The independent group's 16 pharmacies, four of which are in health centres, are spread across south London and south England, property adviser Christie & Co – which is brokering the sale – told C+D.

Another four pharmacies, which operate under the Medipharmacy name but are privately-owned businesses, are not being sold, Christie & Co confirmed.

The average monthly dispensing volume in the 16 pharmacies ranges from 3,300 to 17,500 items, it continued.

The property adviser is inviting offers for one or more pharmacies, with the sale expected to generate “significant interest”, it said.

Christie & Co head of pharmacy Tony Evans said that interest in the region is “strong”, as “it’s a densely populated area” with “a lot of pharmacies”.

Mr Evans expects demand to come from owners of pharmacies near the 16 branches, as well as first-time buyers, who make up approximately 80% of Christie & Co's applicant registry.

“We are in an environment of funding cuts, but there is still appetite in the market,” he added.

Christie & Co's full information suite and data room for the sale can be found here.

C+D has contacted Medipharmacy for comment.

Read how Medipharmacy’s decision to install a dispensing robot was crowned C+D's Business Initiative of the Year 2018.

4 Comments
Question: 
Have you considered selling your pharmacy?

A B, Community pharmacist

Isn’t this the same company who just got a C&D award and had ambitions to expand with their massive robot hub and spoke? If it is then that’s a quick change of fortune

Dodo pharmacist, Community pharmacist

I would imagine they quickly realised that the figures just did not stack up 

Overworked Pharmacist, Community pharmacist

Couldn’t have summed this up better myself! 

R A, Community pharmacist

"as well as first-time buyers, who make up approximately 80% of Christie & Co's applicant registry"

I think this sums up the situation. Only the most financially gullible and naive person would entertain buying a pharmacy under such unfavourable environment.

Let's walk through the situation:

Buyer: NHS determines what it will pay you and you have to accept those terms whatever it is. For more than a decade those terms have been awful.

Supplier: You now have the choice of using either AAH/Alliance Healthcare so a duopoly in wholesale of UK Medicine exists. This leaves virtually no room to negotiate due to lack of competitors. Also between these two firms, they hold exclusive distribution rights for certain drugs this makes it impossible for a new entrant to set up pharmaceutical wholesale as they can't compete against these two wholesalers. Let's not forget the delights Brexit might unleash on us when trying to procure medication including using EU supplier at considerable cost. Therefore the ability to find a decent margin is continuing to shrink.

Competitors: Boots, Lloyds and Well due to their large size can absorb price cuts compared to independents. The independents would struggle because they lack the scale of economy to absorb the loss of reimbursement and increase in costs. Scale of economy is essential in a low margin business such as pharmacy.

Costs: On an annual basis, the operating expense for a pharmacy goes up by 2.5% but the actual profit you make is decreasing by 5% so profits are shrinking every year. 

Conclusion: Owners of Medipharmacy Limited trying to cash in and get out of HMS Titanic. 

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