Boots has reported an almost 20% decline in its 2018 profits compared to the previous year, according to its latest accounts filing.
The accounts, filed to Companies House and published on 10 May 2019, show that the multiple pharmacy earned £317m in profit in 2018, compared with £388m in 2017 — a fall of 18.3%. Revenue also declined by 2.3% year-on-year to £6.8bn in 2018.
Walgreens Boots Alliance, Boots’s parent company, already reported a 23% decline in income over the past year in April 2019, and suggested it would be looking into “consolidation” of low-performing stores in the UK as a result.
According to the latest accounts report from Boots, its “pharmacy sales, gross profit and gross profit margin are impacted by governmental agencies seeking to minimise increases in the costs of healthcare, including pharmaceutical drug reimbursement rates”.
“The amount of government funding available for pharmacy services is typically reviewed and agreed with the pharmacy industry on an annual basis,” it added.
Data published in March 2019 revealed that the Department of Health and Social Care had halved its expenditure on generics price concessions compared with the previous year, with pharmacists saying the cut costs were leaving the profession “in a dreadful position”.
The 2018/2019 financial year has proved to be challenging for many multiples, with McKesson, LloydsPharmacy’s parent company, warning of “further closures” to its European pharmacies.