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Well blames ‘difficult’ pharmacy conditions for £4m drop in revenue

Bestway: Well is diversifying its product offering away from solely dispensing
Bestway: Well is diversifying its product offering away from solely dispensing

Well Pharmacy has blamed “difficult” trading conditions, including funding cuts in England and the category M clawback, for a £3.8 million fall in revenue over a one-year period.

Well’s revenue for the year ending June 30, 2018 was £775.4m, a £3.8m drop from the £779.2m recorded in the previous 12 months, the multiple’s parent company Bestway said in its latest financial report submitted last month (March 27).

Bestway said the drop was “driven by a reduction in funding and drug reimbursement price”.

“Trading conditions remain difficult within the pharmacy sector, with [pharmacy] facing a reduction in overall government funding, increased category M clawback as well as an increase in cost to serve via the national living wage policy,” the report said.

However, profit before tax at Well increased by £5m over the same one-year period, from £3.6m in 2017 to £8.6m in 2018, Bestway said.

The increase was “driven by improved margin on buying as well as cost efficiencies, partially counteracted by a category M clawback relating to prior periods”, it added.

"Diversifying" product offering

Despite a fall in revenue, Bestway said Well “retained its focus on leveraging technology to improve operational efficiency and grow market share”.

The multiple is “diversifying its product offering away from solely medication dispensing”, the report said.

Well created the in-house start-up Well Digital in April 2017, which led to the multiple launching an online prescription service, an iPhone app and digital subscription service 'Eddie', for patients to order monthly supplies of Viagra Connect without having to speak to a pharmacist.

Well’s market share of national prescriptions “remained broadly” at 6%, Bestway said in the report.

“Good progress” on hub-and-spoke rollout

The multiple had made “good progress” in the rollout of its new patient medical records system, and its “central fulfilment” – hub-and-spoke – project during the year, Bestway said.

14 Comments
Question: 
How have trading conditions affected your pharmacy sales?

George Ibrahim, Community pharmacist

Viagra in the post doesn’t count as diversifying your product offering. 

C A, Community pharmacist

Editor - the link to the report doesn't work

James Waldron, Editorial

Thank you for flagging this. I have re-added the link.

Kind regards,

James Waldron, C+D Editor

Paul Knapton, Community pharmacist

Still broken when I try and access it.

James Waldron, Editorial

It works for me, but you can try this instead: tinyurl.com/yxkmqm3k

Best,

James Waldron, C+D Editor

Leon The Apothecary, Student

Did they actually blame having to pay their staff wages that mean they can afford to live to a standard level? Because that's what I just read here.

Leon The Apothecary, Student

Slightly off-topic, but I also have heard that the recent pay rises in line with minimal wage in Day Lewis come with wording that says pay should not be discussed with other employees.

My understanding is that the 1935 National Labor Relations Act specifically indicates that employees have the right to engage in ‘concerted activities for the purpose of collective bargaining or other mutual aid or protection,’

 

Graham Phillips, Superintendent Pharmacist

So if my maths are correct 8.6/775 is a net profit of 0.011% Hardly a sustainable business model. What am I missing ?

Really? Wow, Superintendent Pharmacist

Its 1.1% Graham... remember to multiply x 100 at the end to get the % 

RS Pharmacist, Primary care pharmacist

I would like to see the title of this article renamed “Well announce £5m increase in pre-tax profit” and then let us see the comments? Sometimes we are caught up in the negativity but people are still buying pharmacies and some people are actually still making money.

C A, Community pharmacist

Well/Bestway profit before tax was £14.6 million YE 2015, £27.5 million YE 2016, £3.6 million YE 2017, and £8.6 million YE 2018, so it has rebounded slightly, hardly worth a massive amount of positivity compared to previous years profits. Turnover has increased from £583 million 2015 to £775 million in 2018, so roughly 33% higher turnover for less profit, and I presume turnover is related to work at the coalface?

Peed Off Superintendent, Superintendent Pharmacist

Not really a suprise is it. All of the multiples did nothing to fight the cuts (they could have stopped them if they had grouped together) as they obviously hoped it would destroy their independent pharmacy rivals. Now everyone is getting destroyed including the big boys. GP's stick together and have decent negotiators. Pharmacists are naive and don't have negotiators. Surely none of this is a suprise.

Chris Locum, Locum pharmacist

They played the last pharmacy standing game and did not think of the damage they would sustain themselves. 

Lucky Ex-Boots Slave, Primary care pharmacist

Something probably is missing here. Most, if not all, of those in charge in the big boys are not pharmacists. Pharmacists are more like victims here and should not be blamed. 

*This comment has been edited to comply with C+D's community principles*

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