Profits at Alliance Boots up 20%

Alliance Boots was bought by a private equity firm last year

Pharmacy group Alliance Boots has reported a 20% rise in annual profits in its first year as a private company.

The firm said trading profit rose to £771m in the year to 31 March, in what it described as "excellent" results.

Executive chairman Stefano Pessina said the group was confident about prospects for the coming year, despite the weak outlook for UK consumer spending.

Alliance Boots was bought by private equity firm Kohlberg Kravis Roberts (KKR) for £11bn last year.

Cost savings

Alliance Boots was formed in 2006 through the merger of Boots and Alliance Unichem. It employs about 110,000 people in more than 20 countries.

The company has 3,200 stores and operates 370 warehouses that deliver drugs to doctors and hospitals.

Alliance Boots said overall revenue rose by 4.8% to £15.3bn, with like-for-like revenue, which strips out the impact of store openings and closures, up by 1.9%.

Its Health and Beauty Division delivered "good" revenue growth, rising 4.2%, with trading profits up 20.1%.

Revenues at the Pharmaceutical Wholesale Division rose 5.8% with profits up 15.7%. Alliance Boots said this was a good performance given "particularly difficult market conditions in many countries".

The company said that since the firm was taken private last year, much of its focus had been on seeking cost savings, starting with the integration of Boots and Alliance Pharmacy in the UK.

During the year, it said it made £68m of merger cost savings, meaning it had already achieved its aim of meeting 60% of its £100m-a-year cost savings target by 31 July 2008.