Boots announces UK profits rise

Alliance Boots said today it was in good shape after its UK health and beauty business increased profits for the first time in five years.

In the first set of annual results since a £7bn (€10.28bn) merger of Boots and Alliance UniChem, the enlarged company said group underlying profits rose by more than 7% to £641m (€941.35m) in the 12 months to March 31.

Chief executive Richard Baker described the financial performance as "strong" and said he expected the trend to continue during the current period. Alliance Boots is set to be taken private later this year after deputy chairman Stefano Pessina and buy-out group KKR tabled a successful £11bn (€16.15bn) takeover offer.

Mr Baker said: "We have delivered a strong financial performance while executing one of the biggest mergers undertaken in the UK. Across the group we have seen the positive impact of our pre-merger planning, our new working relationships and our dedicated people all contributing to the good results."

In the UK retail division, total revenues increased by 3.9% to £5.96bn (€8.75bn) with the like-for-like figure ahead by 2.9%.

Growth of 5% was seen in the health category, such as dispensing, while beauty and toiletries achieved a gain of 5.4%, offsetting a decline of 1% in sales of lifestyle products as demand for photographic-based items continued to fall back.

The retail division is made up of around 1,500 Boots sites and community pharmacies taken on following the Alliance UniChem merger.

The group said the Boots branded health and beauty business increased both its trading margin and trading profits for the first time in five years.

Alliance Boots credited the improvement to better stock management, improved buying and marketing programmes, such as the "Gorgeous" advertising campaign in the run-up to Christmas.