Profits up but sales down at Alliance Boots

The owner of the Boots cosmetics and pharmacy chain, Alliance Boots, achieved a double-digit increase in underlying profits in the year to March 31st, but said that sales slipped due to weakness in the euro.

The owner of the Boots cosmetics and pharmacy chain, Alliance Boots, achieved a double-digit increase in underlying profits in the year to March 31st, but said that sales slipped due to weakness in the euro.

Alliance Boots labelled 2012/13 as a "transformational year" for the group due to its new partnership with US drugstore giant Walgreens after the American chain bought a 45% stake last August. Walgreens has the option to fully take-over Alliance Boots in 2015.

Meanwhile, the company launched a new partnership with AmerisourceBergen, one of the largest pharmaceutical wholesalers in the US, in March which will see the parties (including Walgreens) "collaborate on global supply-chain opportunities".

Underlying profit after tax rose by 12.7% to £805m in the year to March 31st as both divisions, Pharmaceutical Wholesale and Health & Beauty, delivered "good" growth.

Revenue however totalled £22.4bn, down 2.6% due to the strength in sterling against other currencies, particularly the euro. This was up 0.6% on a constant currency basis.

The firm's largest division, Pharmaceutical Wholesale, which accounts for nearly three-quarters of group sales, saw reported revenue slip by 2.7% to £16.4bn.

Reported revenues in the Health & Beauty division - which is mainly comprised of its operations in the UK - were down 2.5% at £7.48bn mainly due to a number of important branded medicines coming off patent protection and being replaced by lower-priced generic versions. This offset strong sales of non-prescription medicines, beauty and toiletries.

"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," said Chairman Stefano Pessina.

"We continue to be confident about our prospects and ability to pursue profitable growth, organically, from our synergy programmes and through international expansion," he said.

Recommended

Which assets will benefit as the “jam tomorrow” bubble pops?
Investment strategy

Which assets will benefit as the “jam tomorrow” bubble pops?

With tech stocks, cryptocurrencies and many other “long duration” investments crashing hard, the “jam tomorrow” bubble looks to be bursting. John Step…
24 Jan 2022
Three innovative Asian stocks to buy now
Share tips

Three innovative Asian stocks to buy now

Professional investor Fay Ren of the Cerno Pacific Fund highlights three of her favourite Asian stocks to buy now
24 Jan 2022
Share tips of the week – 21 January
Share tips

Share tips of the week – 21 January

MoneyWeek’s comprehensive guide to the best of this week’s share tips from the rest of the UK's financial pages.
21 Jan 2022
Seven cheap defence stocks to buy now
Share tips

Seven cheap defence stocks to buy now

We’ve got used to a world without war between major powers, but that era is coming to an end as Russia threatens Ukraine and China eyes Taiwan. Buy de…
21 Jan 2022

Most Popular

Shareholder capitalism: why we must return power to listed companies’ ultimate owners
Investment strategy

Shareholder capitalism: why we must return power to listed companies’ ultimate owners

Under our system of shareholder capitalism it's not fund managers, it‘s the individual investors – the company's ultimate owners – who should be telli…
24 Jan 2022
Three innovative Asian stocks to buy now
Share tips

Three innovative Asian stocks to buy now

Professional investor Fay Ren of the Cerno Pacific Fund highlights three of her favourite Asian stocks to buy now
24 Jan 2022
Temple Bar’s Ian Lance and Nick Purves: the essence of value investing
Investment strategy

Temple Bar’s Ian Lance and Nick Purves: the essence of value investing

Ian Lance and Nick Purves of the Temple Bar investment trust explain the essence of “value investing” – buying something for less than its intrinsic v…
14 Jan 2022