Hornby set to reveal £1bn Boots profit
ANDY HORNBY, the man associated with the near-collapse of HBOS, will return to the limelight today as he announces an estimated £1bn profit at the helm of Alliance Boots.
Hornby is expected to say the private equity-owned healthcare and beauty products retailer’s trading profit for the year to 31 March grew at a faster pace than the 11.6 per cent expansion reported in 2008, when the number came in at £842m. Boots is on track to become only the third company in Britain to notch up a 10-digit trading gain, after Marks & Spencer and Tesco.
However, the sum excludes a hefty interest bill on the debt pile accrued when buyout house KKR and Italian pharmaceuticals entrepreneur Stefano Pessina took Boots private in 2007. Last year the business paid more than £623m to service its borrowings, although the cost is likely to be slightly lower this year because insiders believe leverage has been brought down by £500m to £8.5bn.
Sales are forecast to rise nearly 10 per cent to £22.5bn. Boots’ battered wholesale division is likely to show signs of recovery, with trading profits up around 15 per cent year-on-year.
The figures will reinforce hopes of a broader high street recovery and spur talk of a return to the public arena for Boots. But the retailer does not need to re-finance for another five years and a flotation is not expected in the near term.
Hornby has kept a low profile since taking the top job at Boots last June. He drew the ire of shareholders and politicians for his role at HBOS, which lost £10.8bn under his reign in 2008 and had to be rescued by Lloyds TSB.
But after revealing Boots’ results today he will deliver the annual British Retail Consortium (BRC) lecture tomorrow, entitled: “Retailing… what’s changed with the credit crunch?”