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 President of Argentina adopts Jewish godson to 'stop him turning into a werewolf'
- 2 Doctors remove 80 teeth from boy's jaw
- 3 The 'Black Museum': After 150 years, public set to see exhibits from police’s grisly crime museum
- 4 Sir Winston Churchill’s family begged him not to convert to Islam, letter reveals
President of Argentina adopts Jewish godson to 'stop him turning into a werewolf'
The 'Black Museum': After 150 years, public set to see exhibits from police’s grisly crime museum
Downfall of Dustin 'Screech' Diamond, the 'Saved By The Bell' star charged with bar stabbing
Syrian teenager Usaid Barho reveals how he escaped from Isis using a suicide vest
Sir Winston Churchill’s family begged him not to convert to Islam, letter reveals
Millions of Britons struggling to feed themselves and facing malnourishment
British actor Idris Elba cannot star as James Bond because he is black, says shock jock Rush Limbaugh
Ukip member gets into Christmas spirit with Union Flag plea to Santa 'for our country back'
Germany anti-Islam protests: 17,000 march on Dresden against 'Islamification of the West'
Nigel Farage: Ukip leader named 'Briton of the year' by The Times
Douglas Carswell tells Ukip to stop blaming foreigners as youth poll shows Nigel Farage is even less popular than Nick Clegg
iJobs Money & Business
Not specified: Selby Jennings: VP/SVP Credit Quant Top tier investment bank i...
Not specified: Selby Jennings: Quantitative Research | Global Equity | New Yor...
Not specified: Selby Jennings: SVP Model Validation This top tiered investment...
Highly Competitive: Selby Jennings: Our client, a leading European Oil trading...