Boots set for trading progress

The new owners of Boots, Stefano Pessina and private equity firm Kohlberg Kravis Roberts, today said the group was trading "well ahead" of expectations after being taken private for £11.1 billion in July.

The new owners of Boots, Stefano Pessina and private equity firm Kohlberg Kravis Roberts, today said the group was trading "well ahead" of expectations after being taken private for £11.1bn (€15.5bn) in July.

Before the deal - the first ever private equity takeover of a FTSE 100 firm - Alliance Boots was predicted to make a trading profit of £700m (€979.6m) in the year to the end of March 2008.

A recent newspaper report suggested the retail group and drugs wholesaler, which has several outlets in Ireland, was on track to beat this by 6%.

AB Acquisitions - the vehicle created to buy Boots - said today on releasing a mandatory brief statement to the stock exchange it would give "the complete picture" on trading at the end of its financial year. However, a spokesman confirmed the company was trading ahead of previous forecasts.

Boots' owners also said in the statement that they had taken a "prudent approach" to debts used to buy the firm - more than £8bn (€11.2bn) - amid the tightening in credit markets.

The debt involved in the takeover has been the focus of much attention, given the subsequent credit crunch which has seen banks struggle to repackage and sell-on debt.

Meanwhile, today's statement showed the group paid dividends of £1.55bn (€2.16bn) since the takeover, but the firm said this represented a "movement of cash" between two companies.

A spokesman added that profits figures released in the results were provided only for statutory reasons.

"They relate to an intermediary subsidiary and bear no relationship whatsoever to the group's accounts or trading position," he said.

Boots was bought after a length takeover saga, which saw KKR and the firm's then own deputy chairman Mr Pessina fight off competition from fellow buy-out firm Terra Firma, which had offered £10.8bn (€15.1bn) for Alliance Boots in partnership with medical charity Wellcome Trust.

The group's former chief executive Richard Baker quit in July after the deal completed, leaving Mr Pessina in charge of the chain as executive chairman.

Boots' new management team has since been leading an expansion and refurbishment plan, with hopes also to see GP surgeries installed in more than 100 outlets.

It is also trialling a new spa concept, called 'UR Beautiful', with the first spa opened in Kingston, Surrey last month.