P2U Holdings Limited, the group of companies that includes distance dispenser Pharmacy2U and its former competitor LloydsDirect as well as other divisions, made a loss of almost £10m in the year to April according to recently published accounts. 

A Companies House filing for the 2023-24 financial year prepared by auditors BDO in October and published on December 18 describes how losses made by LloydsDirect since its acquisition by Pharmacy2U was announced in October 2023 “have been consolidated” into the group’s accounting. 

Separate accounts for Pharmacy2U as a single entity show it turned a profit of £2.7m in 2023-24, reversing a £5.2m loss incurred in the previous financial year. 

But the group’s total losses for 2023-24 stood at £9.7m – compared to £7.3m the previous year – despite revenues climbing 49 per cent as a result of the merger, reaching £258.7m in the year to March 31, 2024. 

The acquisition led to similar increases in the numbers of NHS patient nominations, which rose by 93 per cent to 1.4 million, and despatched prescription items, which rose by 54 per cent to 25.8 million year-on-year “due to organic growth and the acquisition of LloydsDirect”. 

“In May 2024 the group dispensed 3.5 million items, which represented 3.54 per cent of the English prescription market,” the accounts state.

Margin fell by 1.8 percentage points to 24.2 per cent due to historically lower margins achieved by LloydsDirect under its previous ownership, with the report commenting that medicines procurement “has now been centralised to drive cost savings in the year ending March 31, 2025”. 

Despite the financial challenges posed by the merger, the financial report states: “The integration of Pharmacy2U and LloydsDirect is well advanced and the expected synergies have greatly improved performance of the group post year-end.”

Significant expenses include distribution costs of £43.8m, up from £32.3m in the year before the acquisition, as well as £1.77m costs related to the acquisition and an investigation into the merger by the Competition and Markets Authority. 

Commenting on the outlook for the future, group directors said the company is “well positioned” to grow its core NHS repeat prescription business and “drive further operational efficiencies,” as well as growing its consumer health and online doctor services and playing an “enhanced role” in advanced pharmacy services such as Pharmacy First. 

The directors also said they are “very encouraged” by Labour’s announcements on NHS strategy and the Government’s commitment to increase funding for primary care.