Well Pharmacy made a profit of almost £4m last year notwithstanding liabilities of over £30m, its latest accounts reveal, with the company planning “efficiencies” to increase its profitability. 

The UK’s third largest pharmacy multiple recently published its Companies House filing for the 12 months to June 30 2021. The accounts reveal that the company’s overall profit after tax in 2020-21 stood at £3.9m, up from £2.06m the previous year.

“The directors expect continued profits going forward,” said the report, which also revealed that at £332m, revenue was up more than 13 per cent compared to the previous year.

The financial statement outlines plans to “improve gross margins and maximise profitability by realising efficiencies and developing the business to business operations”. The company already appears to have trimmed its wage bill, which at £10.3m was seven per cent lower than the previous year.  

The profit figures for 2020-21 are “notwithstanding the company having net liabilities of £30,215,000,” said the report. 

These liabilities include £27m owed to Well’s fellow subsidiary companies within parent company the Bestway Group, an increase on the £23.3m that was owed in 2020. The multiple will not be required to pay this money back.

Support from parent company 

Bestway Group said it will “continue to provide financial and other support to the extent necessary to enable [Well] to trade and meet its financial obligations for the foreseeable future.”

“It will continue to make available such funds as are needed by the company and in particular will not seek repayment of amounts currently made available.”

As a result, the directors “have a reasonable expectation that the company has adequate resources to continue in operational existence for the foreseeable future”.

Challenges

In a section detailing some of the challenges facing the community pharmacy sector, the report said the effects of the coronavirus pandemic continue to reverberate “through a shift in people’s habits on how they seek prescription dispensing and doctors’ prescribing habits,” as well as decreased footfall.

Other risk factors include the Government’s flat funding envelope for pharmacies in England, which offers little leeway to cope with inflationary pressures such as national living wage changes or energy costs. 

On the workforce front, Well said it was tackling issues such as the Government’s position on whether locums are self-employed, as well as widespread “workforce availability” problems in community pharmacy and the related cost-inflationary impact. 

It added: “The company continues to manage these closely in order to minimise their ongoing effects.”