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.

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