Jan 16, 2009
Boots underlying Christmas sales up
Jan 16, 2009
LONDON (Reuters) - Alliance Boots, Britain's biggest pharmacy chain, saw a 3 percent rise in underlying sales at British shops in December, driven by demand for Christmas gifts, electrical beauty products and toiletries.
In a letter to staff seen by Reuters on Friday, the group said sales at shops open more than a year rose 1.9 percent in the three months to end-December, with a 6 percent rise in like-for-like dispensing volume helping to offset a 1.7 percent fall in like-for-like retail revenues.
Alliance Boots AB.UL, which sells No7 cosmetics and the Protect & Perfect Beauty Serum range, was bought by private equity firm Kohlberg Kravis Roberts KKR.UL and Executive Chairman Stefano Pessina for 11 billion pounds in June 2007 in Europe's biggest leveraged buyout deal.
The group was created the year before from the merger of British pharmacy chain Boots and pan-European drugs distributor Alliance Unichem.
"The challenging economic times and wholesale markets mean that we will have to work even harder to meet our targets for the final quarter of our financial year ending March 31," Pessina said in the letter. "In 2009 we are likely to face the most difficult market conditions in recent memory."
Many of Britain's retailers are struggling as indebted consumers curb spending amid rising unemployment, sliding house prices and fears of a deep recession.
Alliance Boots said group revenues rose 11 percent in the three months to December 31, excluding VAT and other sales-related taxes.
Revenue at its health and beauty division, which runs over 3,000 shops across Europe and includes the Boots chain, rose 4.2 percent, including an increase of 1.3 percent on a constant currency like-for-like basis.
Revenue in the drugs wholesale business rose 16.3 percent. But adjusting for acquisitions and disposals and on a constant currency basis, like-for-like revenue rose just 0.2 percent.
"Most of our wholesale businesses were adversely impacted by particularly difficult market conditions in the countries in which they operate," Pessina said.
German drug distributor Celesio (CLSGn.DE) said in November its third-quarter net income dropped by a third, hit by lower payments for drugs in Britain and fierce competition in Germany.
"The group's financial position remains strong," Pessina said. "We have a strong cash flow and in addition are currently benefiting from historically low interest rates."
(Reporting by Mark Potter)
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