Boots full year profits soar despite sales fall

EBITDA advanced 4.5% to £1.51bn in its year to March 31.Trading profit in its 2,476-store health and beauty division rose 6.8% to £865m and rose 8.8% to £813m in the UK. UK like-for-likes fell 3.1% while in its opticians arm rose 2.7%.

It is the first time Boots has unveiled figures since entering into a strategic partnership with US giant Walgreens last year which will ultimately lead to a merger. Last August, Walgreens took a 45% stake in Alliance Boots.

International trading profit fell 17.5% to £52m. Like-for-likes in the Republic of Ireland fell 4.4% and by 1.6% in Norway. Like-for-like sales grew 3.7% in Thailand and were down 12.5% in the Netherlands.

Alliance Boots reported underlying profit after tax rose 12.7% to £805m.

Boots online sales rose 17% with mobile now accounting for 25% of visitors and click-and-collect now 45% of orders.

The retailer said that over 60% of retail transactions were made by its 17.9 million Boots Advantage Card loyalty card holders. It added that these customers spend 60% more on average than non-card holders.

Boots said around 90% of active members are women, representing nearly two thirds of the adult female population in the UK.

Boots said: “Our health and beauty division delivered a good overall performance, despite tough retail markets across Europe and further regulatory pressures which impacted dispensing profitability. The UK profit performance was particularly strong due to a focus on our core health and beauty categories, combined with the benefits of further development of the operating platform. Results were, however, disappointing across our other European markets, which were partially offset by good progress in building profitable sales in Asia and North America.

“We attribute this performance to the hard work and commitment of our people. They have enabled us to deliver excellent customer care and develop and launch exciting new innovative products and services.”

Executive chairman Stefano Pessina said: “This has been a transformational year for Alliance Boots due to our exciting new strategic partnership with Walgreens, which we are further strengthening by our recent joint agreement to partner with AmerisourceBergen.

“Against the backdrop of this major corporate activity, and the challenging conditions across our markets, we have again delivered a double digit growth in underlying profit after tax. Our people are at the heart of everything we do and it is through clear leadership combined with great teamwork that we have been able to deliver such consistently good results.

He added: “We continue to be confident about our prospects and ability to pursue profitable growth, organically, from our synergy programmes and through international expansion. 

“In a world where globalisation is increasing at a pace, our transformational partnerships put us together in a unique position to become the clear world leader in both pharmacy and pharmaceutical wholesale. I truly believe that we have the brands, intellectual capital and, most importantly, the management expertise to create value for our stakeholders across the world for many years ahead.” 

Boots said it is to launch a new international website with more than 23,000 products from the Boots range.