Alliance Boots gets a lift from strong sales of anti-ageing cream
Tuesday 19 May 2009
Alliance Boots has posted robust full-year trading profits and sales, as customers seek comfort with its anti-ageing cream during the recession, but the health and beauty giant revealed deep job cuts at its wholesale pharmaceutical division.
Stefano Pessina, the executive chairman of Alliance Boots, which operates the Boots high street stores, said: "We are on track to become the world's leading pharmacy-led health and beauty group."
At Boots UK, total revenues rose by 3.2 per cent and underlying sales grew by 1.3 per cent, boosted by strong sales of its No 7 cosmetics and skincare brand. Boots has benefited from soaring sales of its No7 Protect & Perfect Beauty Serum cream, which led to feverish shopping among female customers when it launched in 2007. Boots said it had sold more than 1 million units of its latest anti-ageing cream, No7 Protect & Perfect Intense Beauty Serum, which is clinically proven to help push back the years, since it was launched two and a half weeks ago.
For the year to 31 March, Alliance Boots – taken private in June 2007 in an £11bn deal with the private equity firm KKR – posted trading profit up by 11.6 per cent to £953m and total revenues higher by 15.5 per cent to £20.5bn. But its pharmaceutical wholesale business will cut 1,500 jobs, equal to 10 per cent of the division's workforce over the coming year, to save £55m. About 200 of the job losses will be in the UK, although a quarter of the cut has already been made. However, Alliance Boots has added 1,700 net jobs over the year, as it invests in its stores and customer service.
Mr Pessina described trading conditions in the pharmaceutical wholesale market as the "most difficult I have ever seen". In addition to regulatory changes, tough competition and currency movements, Alliance Boots has been hit by a growing trend among pharmaceutical companies to sell direct to pharmacies using fewer wholesalers as distributors or selling only through a small number of selected wholesalers.
Despite this, its pharmaceutical division posted a 4.4 per cent increase in trading profit, although this was the lowest among its divisions, in reported currency, but a 0.3 percentage point drop in trading margin.
However, the debt shadow of the deal that took Alliance Boots off the stock market in 2007 still hangs over the group. As of 31 March 2009, the company had net debt of £9bn, and over the year its underlying net finance costs – including interest payments of £646m – came in at £705m.
Alliance Boots posted pre-tax profits of £13m in 2008/09, compared with a £64m loss the year before. By January, the company had delivered £100m of savings – 18 months ahead of schedule – from the merger of Boots and Alliance Unichem in 2006.
- 1 Lego breaks out of the toy box and heads for the gallery
- 2 A bottle of wine a day is not bad for you and abstaining is worse than drinking, scientist claims
- 3 Piers Morgan attempts to save the Union by promising to go back to the US if Scotland votes 'No' to independence
- 4 Tyler, The Creator says having new U2 album automatically downloaded on his iPhone was 'like waking up with herpes'
- 5 Grandmas keep accidentally tagging themselves as Grandmaster Flash on Facebook
David Haines remembered: Death of British hostage executed by Isis lamented from the Balkans to Sudan
Jennifer Lawrence and Kate Upton nude pictures exhibition cancelled after artist concedes photos were 'stolen property'
David Haines beheading: David Cameron says Britain will hunt down Isis 'monsters' shown in video murdering aid worker
Piers Morgan attempts to save the Union by promising to go back to the US if Scotland votes 'No' to independence
Jennifer Lawrence to make public appearance after nude photo leaks as Met Gala Ball 2015 co-host
Daniele Watts: Django Unchained actress detained by Los Angeles police after being mistaken for a prostitute
George Galloway on Scottish independence: The political class is doing what Hitler couldn’t – destroying Britain
Scottish independence: Nationalist leader Jim Sillars threatens pro-union companies with 'day of reckoning' after independence
Scottish independence: Yes campaign feels the heat as Alex Salmond's NHS claims come under furious attack
Scottish independence: Britain faces 'constitutional crisis' at next election
£23m Birmingham cycle scheme is attacked by Tory councillor for not catering to the elderly
iJobs Money & Business
£280 - £320 per day: Ashdown Group: The Ashdown Group have been engaged by a l...
£400 - £450 Per Day: Clearwater People Solutions Ltd: **URGENT CONTRACT ROLE**...
£35000 - £38000 per annum + Benefits: Ashdown Group: Training Coordinator / Pl...
Data Governance Manager (Solvency II) – Contract – Up to £450 daily rate, 6 month (may go Permanent)
£400 - £450 Per Day: Clearwater People Solutions Ltd: We are currently looking...