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Boots in a Healthy Position

Alliance Boots, led by Italian executive chairman Stefano Pessina, released details of its financial performance two years after he took the company private with the backing of American equity house KKR.

The company said it had continued to perform well in the year to March 31 - despite what it said was "the increasingly challenging business environment".

Boots UK, the health and beauty part of the business - essentially based in Nottingham but steered from an office above its Oxford Street store in Sedley Place, London - saw revenues on a like-for-like basis rise slightly by 1.3% to £6.16bn. Trading profit was up into double digits at 11.2%. The UK trading margin improved slightly to 9.9%.
Boots Opticians, which recently merged with Dollond & Aitchison, saw its revenues rise 1.7% to £181m on a comparable basis with last year. Mr Pessina said the merger had already led to savings of £100m, 18 months ahead of schedule.

Boots is now part of a company based out of Switzerland, which reflects its new owners' ambitions to export the name across the continent and further afield. Its pharmaceutical wholesale division already supplies chemists across Europe, becoming an £11.3bn business.

Alliance Boots revenues rose 12.4% to £17.2bn. Trading profit came in at £841m, up 9.1%. Profit for the year after allowing for other deductions was £101m.

Mr Pessina said he was pleased the company had again reported strong growth in revenues and trading profit.
He said: "This reflects the underlying strength of our two core business activities, the importance of health and wellbeing to both individuals and governments, and the benefits from transforming our group.

"The group's financial position remains strong, reflecting a focus on profit generation and working capital management, combined with secure long-term funding arrangements.

"We have a strong cash flow and, in addition, are benefiting from historically low interest rates.
"Since our year end, Alliance Boots has continued to perform well, reflecting the markets in which we operate and the further benefits we are generating through transforming the group.

"As a result we remain confident about our prospects for the year ahead. This is a great group with great brands and market leading positions in attractive markets. We are fully committed to the development and growth of Alliance Boots and believe that we are on track to become the world's leading pharmacy-led health and beauty group."

He said the cash generated during the year had been spent largely on improving stores and logistics. It completed the integration of Boots the Chemists and Alliance Pharmacy businesses. Boots apotek pharmacy concept was rolled out in Norway and Boots apotheek is being tested in The Netherlands.

Source: www.thisisnottingham.co.uk|

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