Boots to put extra £120m in healthcare

Boots said it was "aggressively looking" for new acquisitions for its healthcare division yesterday as it announced plans to invest an extra £120m in Boots Healthcare International, which makes Nurofen, Strepsils and Clearasil. The company said it was looking for deals in the United States and Europe.

The extra investment will be used for marketing and new product development as Boots tries to boost profits from the division to more than £100m within four years. However, Boots warned that the extra investment would mean profits at Boots Healthcare International would be limited in 2002-03. Analysts have forecast profits of around £65m for the current year. Nick Bubb at SG Securities, said: "It's jam tomorrow paid for by less jam today."

The Boots plans coincided with a Consumers Association survey which showed that it was the most expensive chemists' chain. The report tested the price of a basket of six popular products. It concluded that Lemsip and Nurofen can often be bought at Asda and Tesco for half the price of other stores.

Across health and beauty categories the watchdog found that Tesco offered the lowest prices while Sainsbury's and Safeway were higher than the average.

Boots said the survey was "misleading" as it did not take account of promotional offers.