Boots made a post-tax loss of £111m in the 12 months to August 31 2021, its latest accounts reveal, bringing its losses down by 57 per cent compared to the previous year.

The Companies House filing for 2020-21, which was published this week, shows an improved performance for the UK’s largest pharmacy multiple after it lost £253m in 2019-20, although it did not manage to make an overall profit.

It reported an operating profit of £8m in 2020-21 after posting an operating of loss of £245m in the previous year, partly attributed to a £321m reduction in operating costs.

However, this was offset by a higher tax bill and rising finance costs. Meanwhile, shareholders’ equity increased by 17.8 per cent to £1.6bn. 

The report shows there were 2,276 stores within the chain as of August 31 2021, 60 fewer than at the same point in 2020. Boots said it “takes an active approach to store portfolio management to ensure the right stores are at the right location,” adding that “around 200 stores” had been closed or consolidated since a ‘strategic optimisation’ scheme was announced in 2019. 

Overall revenue down 2.3 per cent 

Overall revenue fell by 2.3 per cent to £5.8bn during 2020-21, with revenue from scripts and services down 0.7 per cent to £2.9bn. The pharmacy stream of the business accounted for 39.3 per cent of the company’s overall revenue, a fractionally higher share than in previous years.

Boots said that although an “increase in Covid testing and vaccinations” helped to “strengthen” pharmacy sales, “lower prescription values”, a drop in demand for services such as travel jabs during the pandemic and Government cost-cutting all had a negative impact on this section of the business.

Meanwhile, retail revenue decreased by 3.3 per cent to £3.5bn. Despite this, Boots.com sales “continued to perform above expectations” with a 54 per cent year-on-year revenue increase, the number of Boots Advantage card holders rose from 10.5 million to 12 million.

Retail revenue is impacted by factors such as seasonality and “highly competitive” behaviour on pricing by Boots and its competitors, as well as the “customer’s desire for value and convenience,” the report claimed.

Despite these results, the multiple said that ‘comparable’ revenue – takings from those stores that remained open for at least 12 months without closing for seven or more consecutive days – rose by 2.8 per cent due to a “lesser impact” from Covid compared to the previous year.

Temporary rates relief of £112m

The report shows Boots benefited from a £112m reduction in business rates due to a temporary Government policy that has now ended. It also cites £10m in public furlough funding during 2020-21, as well as a payment of £135m in advanced NHS funding in the 2019-20 financial year, £55m of which had yet to be repaid as of August 31 last year.

“The company’s performance and relevant exchange rates are impacted by the current geopolitical environment, including the continuing uncertainty as a result of Covid-19,” the report said. 

The strategic report makes no mention of parent company Walgreens Boots Alliance’s unsuccessful attempts earlier this year to sell the company after potential buyers reportedly balked at the price tag, thought to be at in the region of £7bn.