Pharmaceuticals arm saves Boots from loss after pounds 68.5m charge

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The Independent Online
A SPARKLING performance from its chemist chain helped Boots to compensate for the exceptional costs of the Do It All rationalisation and the withdrawal of Manoplax, the heart drug, leaving its full-year profits 2.6 per cent ahead.

The group made pounds 415.9m before tax, up from pounds 405.2m, on sales 5.2 per cent higher at pounds 4.17bn. But that was after pounds 68.5m of exceptional charges, including pounds 36.6m on Do It All and pounds 35m for withdrawing Manoplax after it was found to increase the risk of death. Underlying profits were 18.8 per cent ahead.

Chemist chain profits rose 13.3 per cent to pounds 322.9m, on sales 5.4 per cent ahead at pounds 2.98bn. Sir James Blyth, chief executive, attributed the success of the chain to the wide range of own-label products in the stores. These now account for about 43 per cent of sales compared with about 37 per cent five years ago. They include Soltan, the suncare range, which now sells pounds 20m and the Natural Collection range, at pounds 50m.

The group opened 48 stores, mainly in market towns and suburbs, as part of its strategy of adding 250 small sites within five years. That will bring the total outlets to about 1,400.

Halfords, the car accessories business, underlined its recovery by trebling profits to pounds 14.7m. That partly reflected the opening of 16 superstores, while 27 high-street stores closed, as well as a rise in its share of the market for bicycles.

Sir James said the review of the options for pharmaceuticals was likely to take time. He added that nothing, including keeping the business intact, had been ruled out, although Credit Suisse First Boston had been appointed to value it.

The division made pounds 94.2m profit before the pounds 35m Manoplax charge, against pounds 91.4m last time. Profits this year will suffer from the loss of licensing income on two products.

Do It All lost pounds 12.2m, on top of the restructuring charge while Fads, the DIY chain, lost pounds 800,000 against pounds 2.8m profit last time.

Earnings per share were 27.7p, or 33p before exceptionals, up from 27.1p. The dividend was increased 11.9 per cent to 15p via a 10.1p final. The shares rose 22p to 527p.

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