UK pharmaceutical giant Boots reported a first-half profit rise of 9.5% as it cut 2,000 jobs and saw...
UK pharmaceutical giant Boots reported a first-half profit rise of 9.5% as it cut 2,000 jobs and saw an increase in sales of more cosmetics and perfumes over less profitable entertainment and household items such as CDs.
Net income rose to £164.4m, or 18.6p a share, in the six months ended 30 September from £150.3m, or 17.1p, for same period the year before.
'We've covered the short term by cost savings, we've been able to manage the mix, so it has gradually become more profitable,'' said finance director David Thompson. 'Longer term, we have to grow the top line. You can't cut your way to glory.''
Boots is also adding services such as dentistry and widening its range of cosmetics and other beauty products amid competition from supermarkets chains including Tesco. It aims to save £250m over three years. The bulk of the profit gain came from replacing entertainment and household goods with more profitable health-and-beauty products and £30m of savings generated mostly by job cuts at Boots the Chemists. The 1,400-outlet high-street chain now employs 33,000 people. About 500 of the jobs were lost as the firm consolidated three administrative buildings into one at its Nottingham, central England headquarter. Since 1999, the number of senior managers has been reduced 15% to 200.
The amount of store space devoted to entertainment and household goods dropped to 8% from 19% in the same period, Thompson said. Over four years, sales of 'premium' cosmetics have risen to 52% from 42%.
The Boots Company manufactures and sells health and personal care products, via retail pharmacies and stores worldwide. The group offers a range of well-being services, encompassing dentistry and chiropody, optician services via nearly 300 Boots Optician stores, and retails cycles and car/cycle parts and accessories at more than 400 Halford outlets.
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