Fewer colds and coughs but Boots has the cure for figures

FEWER coughs and colds over the mild winter and pressure on income from prescriptions failed to prevent Alliance Boots from posting higher profits at its UK health and beauty operations.

The group, which has more than 2,500 UK stores, saw beauty and toiletries rise as last year’s launch of its exclusive Champneys range of bath products gave the division a 2 per cent lift.

Across UK retail, profits were 5.2 per cent higher at £750 million, although sales were down 0.3 per cent at £6.4bn for the year to 31 March, driven by a 1.6 per cent decline in dispensing and related income to £2.4bn.

Executive chairman Stefano Pessina said: “In the coming year, we expect the economic environment to remain difficult with continuing pressure on both consumer and governmental expenditure. This will generate both challenges and new opportunities for us.”

While it dispensed more prescriptions than a year ago at 224 million items – up 1.9 per cent on a like-for-like basis – Boots faced further reductions in reimbursement rates set by the UK government.

It was also affected by more branded medicines losing patent protection and being substituted by cheaper rivals.

In the retail health category, revenues decreased by 2.4 per cent to £891m due to strong competition and lower volumes of cough and cold remedies following a quieter winter for such ailments.

Alliance Boots’ pharmaceutical wholesale division, which supplies medicines to more than 160,000 pharmacies, doctors, health centres and hospitals in 21 countries, saw revenues surge 27.9 per cent or 2.4 per cent on a like-for-like basis. Group-wide profits were up 10.2 per cent to £693m.

The company employs about 75,000 staff in the UK.