Boots looks to Europe to provide a tonic

Boots is considering expanding its Boots the Chemist chain overseas for the first time since the early 1980s when forays into Canada and New Zealand proved unsuccessful.

The announcement yesterday came as speculation grew that the company may soon use its pounds 600m cash pile to mount another share buy-back.

Boots has ruled out tackling the US market which has been a graveyard for so many UK retailers, but is looking at Europe and the Far East. A store in Dublin will open in October.

Lord Blyth, Boots' chairman, said: "We are all too aware of the problems that have affected other retailers but our approach will be prudent, gradual and pretty long-term."

Boots' ambitions in France and Germany would be hampered by regulations that bar the multiple ownership of pharmacies. However, there is a strong prospect of these markets following the UK's de-regulated approach.

Boots made the announcement as it reported a slight fall in pre-exceptional profits to pounds 493m for the year to March. Boots is undertaking a review of costs, particularly at its Nottingham headquarters where it employs 11,000.

Boots said it would consider a share buy-back "only when the time is right". There was also no fresh news on the fate of Do It All, the loss- making DIY chain jointly owned by WH Smith. Boots' share of Do It All's losses were pounds 10m last year while the Fads and Homestyle businesses lost pounds 12m.

Investment column, page 16