Boots UK sees slow sales as KKR stays on

ALLIANCE Boots yesterday warned of a slow UK market compared with its international performance, and confirmed that investor Kohlberg, Kravis & Roberts (KKR) will be staying on board.

Boots UK – the group’s main health, beauty and pharmacy chain in Britain – reported a like-for-like sales increase of 0.5 per cent in the year to 1 March, while its opticians stores recorded a 2.5 per cent underlying revenue decline.

These translate into a like-for-like sales increase of 0.4 per cent across Boots UK stores.

Alliance Boots as as a whole posted a 14.2 per cent rise in trading profit to £1.05bn.

Stefano Pessina, executive chairman (right), said the tough conditions look set to persist.

“Looking to the year ahead, we are planning for consumer demand to be subdued and expect governments to continue to seek ways to contain growth in healthcare expenditure,” he said.

Alliance Boots was taken private for £11bn in 2007 by KKR and Pessina in what was Europe’s biggest leveraged buyout at the time. The company yesterday dismissed any talk of a float in the near future. “We believe that there’s quite a lot more that we can still do as a private company,” it said. Nick Bubb, retail analyst at Arden said: “The money is to be made in the wholesale pharmaceutical business, that’s where Alliance Boots is doing well.The UK is more or less flat.”

Net debt was reduced by £546m to £7.84bn.