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Boots in £1bn profit haul

ALLIANCE Boots yesterday posted an annual profit of more than £1bn – becoming only the third UK retailer to pass that milestone. The group, taken private in 2007 in Europe’s biggest leveraged buyout, also said there was strong growth in own-brand products like No7 cosmetics.

Its international wholesale operations also helped in a tough consumer climate.

Alliance Boots was bought for £11bn by private equity firm KKR and billionaire executive chairman Stefano Pessina.

The company said trading profit rose 12.7 per cent to £1.07bn in the year ended 31 March. The only other UK retailers to break the £1bn are Tesco and Marks & Spencer.

Revenue rose 9.6 per cent to £22.5bn, while net debt fell £645m to £8.39bn.

Chief executive Andy Hornby said: “We’re certainly not expecting the economy to improve at all. We’re budgeting for a subdued environment.

“Nevertheless, we believe we’re competing in attractive markets and our formula is working.”

The company’s wholesale pharmaceutical division also performed strongly with a 17.2 per cent rise in trading profits. Revenue at its lifestyle operations fell by five per cent, though, which was partly blamed on lower demand for photographic services. Alliance Boots now operates 2,473 health and beauty stores in the UK, of which 2,380 included a pharmacy. Alliance Boots, which has 115,000 staff, traces its roots to a single shop selling herbal remedies in Nottingham in 1849.

ALLIANCE BOOTS THRIVES AFTER BUYOUT
£11bn
the price equity firm KKR and billionaire executive chairman Stefano Pessina paid for Alliance Boots in 1997

12.7%
the annual rise in profits in period to 31 March

£1.07bn
annual profit

£22.5bn
annual revenue

115,000
the number of staff Alliance Boots has worldwide