Hornby back on track at £1bn Boots

FORMER HBOS chief executive Andy Hornby was back in the black yesterday after revealing that high street chain Alliance Boots had joined the select group of retailers to record a £1 billion profit.

The disgraced bank boss unveiled his first set of results since being installed at the helm of the company last June. The pharmacy group was taken private in Europe's largest leveraged buy-out in 2007.

But despite the impressive results, Hornby remained cautious about the trading outlook for the rest of the year. "We don't see why the outlook for the consumer should improve radically this year," he said.

"We're budgeting for the outlook for the European consumer to be quite tough. Whilst we don't expect to see a major economic improvement over the next 12 months, we do believe our formula is working."

Despite the pessimistic outlook, executive chairman Stefano Pessina said he aimed to build a global brand by introducing ranges such as Boots Laboratories into markets such as Italy and Spain this year.

He said: "Our strong financial position will enable us to continue to grow both organically and through acquisitions. We are increasingly establishing strategic partnerships with other leading businesses to accelerate our development, both in the UK and other markets."

In 2009, the firm completed the merger of its operations with optometrist firm Dollond & Aitchison, and established partnerships with Waitrose and Mothercare. The firm also brokered a deal with consumer goods giant Procter & Gamble to distribute Boots-branded products in Pessina's native Italy.

Capital investment went into rebranding 1,000 Alliance Unichem chemists into the "your local Boots pharmacy" format and retail store openings.

Hornby, who headed HBOS before it was eventually bought by Lloyds in a government- brokered rescue, said he felt "privileged to be part of a strong team and to work with such a fantastic brand". He also highlighted the pace at which the group was paying off its massive debt burden, which fell to 645 million to 8.39bn.

Trading profit rose 12.7 per cent to 1.07bn in the year to 31 March, helped by launches such as No 7 Protect & Perfect skincare. It becomes the third UK retailer to post profits of more than 1bn, behind Tesco and Marks & Spencer.

Group revenues rose 9.6 per cent to 22.5bn. Underlying profit after tax more than doubl ed to 602m.

Pessina, who teamed up with private equity firm Kohlberg Kravis & Roberts to buy the group for about 11bn in 2007, said he had no plans to relist the company for some years.