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Multiple pharmacy Boots has reported a more than 250% decline in its 2020 profits compared with the previous year.
The multiple’s accounts covering the year ending 31 August 2020, filed at Companies House, show that it reported a £258m loss in 2020, owing to the COVID-19 pandemic, after having reported a £167m profit in 2019 — a fall of 254.5%.
Overall, Boots’ revenue decreased by 10.8% in 2020 to £6.0bn. However, pharmacy revenue only fell by 0.8% in 2020 to £2.3bn, after falling by 2.2% in 2019.
Boots attributed this to “favourable NHS funding levels [having] mitigated the impact of ongoing lower prescription volume and reduced demand for services such as travel vaccinations” during the pandemic.
The accounts show that Boots “received advanced funding of £136m from the NHS, which is repayable by way of offsetting against future payments to the NHS”, of which Boots said £25m had been repaid as of 31 August 2020.
Community pharmacies in England were given £370m in advance payments in 2020 to cover additional costs associated with the COVID-19 pandemic, which the government had said it was considering writing off.
The multiple’s dramatic losses follow a steady decline in profits in 2019 and 2018, when Boots’ profits fell by nearly 50% and 20%, respectively.
In 2020, Boots also reported receiving £11m from the government to cover personal protective equipment costs and £36m as part of the national furlough scheme.
The accounts added that, as a result of government restrictions, “more than 100” stores were temporarily closed in the three months ending 31 May 2020 “mainly in high street, train stations and airport locations”.
In 2019, Boots’ parent company Walgreens Boots Alliance announced plans to permanently close 200 UK stores by 2021 as part of “a store optimisation programme”, which was expected to impact revenue by 1%.
The accounts — published on 18 May 2021 — note that “the majority of the impacted stores were closed” by the end of August 2020, with Boots now operating 129 fewer stores in 2020, compared with 2019.
“During the year, the company experienced certain adverse impacts of COVID-19, particularly in the second half of financial year 2020,” the accounts said.
“The company took measures to keep stores open during this period, incurring incremental selling, general and administrative expenses, including higher employee costs and store expenses related to social distancing and incremental cleaning,” it said.
It added that “pharmacy volume was impacted by a decline in doctor visits and hospital patient admissions in the third quarter”.
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