Andy Hornby quit as Boots chief because of stress reveals retail giant

ANDY Hornby's resignation as chief executive of pharmacy retailer and wholesaler Alliance Boots last March was because of stress, the group's executive chairman disclosed yesterday.

Hornby shocked the business world when he quit less than two years after joining the retailer following the collapse of banking group HBOS, where he had also been chief executive.

Stefano Pessina, executive chairman of Alliance Boots, unveiling robust annual results at the health and beauty group yesterday, said there had been no bust-up between the two men or the rest of the board.

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"Andy was stressed, he had difficulties," Pessina said. "He had decided to come back to work in a company where the workload is a substantial one a little bit too early.

"My personal relationship with him could not be better. We had no problems." Pessina added at a London news conference: "It happens every day that there are managers who are stressed and decide to take time off."

When he left, Hornby said: "After an intense last five years as CEO of two major companies, I have decided to take a few months' break and, having discussed it with the board of Alliance Boots, to stand down as group chief executive".

Pessina said a search for a new group chief executive would happen but that there was "no hurry" given how well the company was performing.

Yesterday's further shedding of light on the episode came as Pessina revealed that Alliance Boots's trading profits rose 14.2 per cent to 1.05 billion in the year to end-March, on revenues up 15 per cent at 20.2bn.

In the UK health and beauty division, like-for-like prescription dispensing volumes rose 3.6 per cent, while same-floorspace retail revenues were up 1.2 per cent. Profit margins in the UK were 10.6 per cent, up 0.4 per cent.

Health and beauty trading profits lifted 5.5 per cent to 767 million, while pharmaceutical wholesale profits jumped 36 per cent to 320m, boosted by the acquisition of majority stakes in joint ventures in Turkey and Germany.

The group said conditions for the wholesale arm continued to be difficult due to regulatory pressures. Pessina said: "Looking to the year ahead, we are planning for consumer demand to be subdued and expect governments to continue to seek ways to contain growth in healthcare expenditure."

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He said a priority for the group, which already operates in 25 countries, was further international expansion, including acquisitions.

There was a good pipeline of potential targets abroad, Pessina added. "We have quite a substantial sum of money for acquisitions," he said.