Healthy revenue at Alliance Boots16 May 2012
Alliance Boots has boosted revenue by 18 per cent to £23bn as its pharmaceutical wholesale division recorded double-digit growth.
The Nottingham-based business, which owns the high street chemist chain Boots, also increased earnings and trading profit, with year-end borrowings reduced by £826m. Trading profit for the year ended 31 March 2012 jumped by 12.4 per cent to £1.2bn, with EBITDA up 10.2 per cent to £1.4bn.
Executive chairman Stefano Pessina said: "Alliance Boots has again delivered double-digit growth in trading profit while at the same time generating a strong operating cash flow to fund investment in growth and substantially reduce net borrowings.
"This performance, which reflects the excellent work of our teams, has been achieved through a combination of organic growth and benefits from the previous year's acquisitions.
"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."
Revenue in the pharmaceutical wholesale division was up 27.9 per cent to £16.8bn. Sales slipped slightly at Boots UK to £6.37bn, down by 0.3 per cent, while the opticians division grew by 0.9 per cent to £332m.
In the UK, the group's health and beauty arm posted an increase of 5.2 per cent in trading profit to £750m. During the year 40 Boots stores were opened, taking the total portfolio to 2,477, with Boots Opticians operating 624 practices.
The number of members for the Boots Advantage Card loyalty scheme, where customers earn points on purchases, increased by 6 per cent in the period to 17.8 million.
Revenue in the retail health category, where Boots is a market leader, decreased by 2.4 per cent to £891m as sales were affected by "strong" competition and lower volumes of cough and cold-related non-prescription medicines following a "significantly" lower incidence of such illness this winter, the group added.
Beauty and toiletries increased sales to £2.15bn, with growth "particularly strong in indulgent bathing", which was largely because of the April 2011 launch of the new Champneys range, which is exclusive to Boots, with haircare and personal care sales also up year on year.
In the lifestyle category, revenue decreased by 0.1 per cent to £962m, reflecting the continuing decline in the photographic market and lower electrical beauty sales as a result to strong competition, Alliance Boots said. Pre-tax profit for continuing operations at the group fell from £676m to £660m.
Pessina added: "We are confident about our future prospects and ability to pursue profitable growth, both organically and through further international expansion.
"This will be supported by our strong operating cashflow and secure funding arrangements, which will enable us to continue to invest while at the same time reducing net borrowings. The development of new and existing partnerships will be a key component of our future growth."