Boots saw its profits fall by almost 50% in 2019, owing to “lower revenue and gross margin”, according to financial accounts filed to Companies House and published on 18 May 2020.
The filings show that the pharmacy multiple earned £167m in profit in 2019, compared with £317m in 2018 — a decrease of 47.3%.
The strategic report set out within the filing said the decline was the direct result of a fall in operating profit, which dropped by 49.4% from £391m in 2018 to £198m in 2019.
The document said this was a result of “higher administrative expenses primarily from £70m of restructuring costs together with lower revenue and gross margin”.
In February 2019, Boots announced plans to cut up to 350 jobs from its head office as part of a restructuring drive to “reduce decision-making time” and “improve efficiency”.
The accounts add that the company’s overall revenue declined by 1.8% in 2019, from £6.79bn in 2018 to £6.67bn in 2019.
In particular, the multiple’s revenue fell by 2.2%, mainly owing to “lower volume and lower revenue item growth and continuing UK government reimbursement pressure”.
The multiple’s falling profits in 2019 follow on from an initial decline in 2018 when the multiple saw its profits decrease by a fifth.
The company’s declining profits come after McKesson — parent company of LloydsPharmacy — announced on 20 May 2020 that its operating profit for its European pharmacy sector increased by 10% on an adjusted basis over the course of the 12 months to May 2020, while its adjusted operating profit accrued over the past three months since February 2020 is more than double (239%) that which was accrued during the same three-month period in 2019.
The Pharmaceutical Journal has approached Boots for comment.