But Lord Blyth, who steps down as chairman next summer, was looking a lot happier yesterday. A 1.3 per cent rise in full-year pre-exceptional profits to pounds 561m may not be the stuff of investor excitement but there are reasons for optimism. First, consumer spending is improving. The Boots the Chemist business improved market share in all its key sectors and margins edged up by 0.2 per cent, even if like-for-like sales growth was limited to 2.6 per cent.
The main chemists business, still 80 per cent of group profits, is leveraging the Advantage loyalty card with new projects such as the Boots baby club. Boots has already moved into catalogues and an e-commerce strategy will be unveiled soon. The company is also bullish about international prospects, with fledgling operations in Holland and Thailand starting to be rolled out and the bigger prize - Japan - under trial.
With Do It All gone - hence the pounds 318m write off in last year's accounts - Halfords is the only Boots business not operating under the Boots brand. But with profits up 17 per cent to pounds 40m and new formats being tested, it remains core. Elsewhere the group is looking for a deal at Boots Healthcare International, which includes brands like Nurofen and Strepsils. But if acquisitions cannot be found, more cash could be returned to shareholders.
Looking forward, Boots faces a number of strategic issues. Its main chemist business is facing increasing competitionfrom supermarkets such as Tesco and the prospect of a more muscular Superdrug-Asda combination if the Kingfisher merger goes through. But though there will be pressure on prices Boots has shown before that its brand is strong enough to cope. Meanwhile, the trials with doctors' surgeries and in-store dentists are services only a trusted healthcare name like Boots can realistically offer.
On Teather & Greenwood's current year profit forecast of pounds 595m, the shares - up 13.5p to 844p - trade on a forward multiple of 19. Not without risk but good value nevertheless.Reuse content