ANCE Boots, owner of the high street Boots stores, yesterday boasted a second straight year of double-digit growth in underlying profits, despite falling sales.
The firm, which has been 45 per cent owned by US retail giant Walgreen since last August, said that revenue for the year to 31 March was down 2.6 per cent at £22.4bn, citing “challenging market conditions prevalent across the world.”
Yet underlying profit after tax climbed to £805m, up 12.7 per cent on a year earlier. The Boots retail wing, known as the firm’s health and beauty division, saw trading profits rise 6.8 per cent to £865m, despite sales dropping 2.5 per cent to £7.48bn.
While austerity measures and global economic slowdown may hit the firm by squeezing consumer demand, belt-tightening could actually benefit Alliance Boots, its report said.
“Demographic and social pressures [are] continuing to drive demand for healthcare and medicines while payers continue to attempt to constrain overall costs,” it said. “These trends continue to drive demand for generic medicines and for high quality services delivered to local communities, both of which we are ideally placed to meet.”
However, the company admitted that the contraction in its market “reflects government measures across Europe to constrain growth in healthcare costs”.
Alliance Boot’s pharmaceutical wholesale branch brought in £16.4bn during 2012-13.