Alliance Boots has reported sales up 2% in its health and beauty division to £3.637m in its mid-year update with like-for-like sales for Boots UK up 1.8%.
For the six months ending September 30, on a constant currency basis, sales at the health and beauty division increased by 1.8%, up 0.3% on a like-for-like basis. At Boots UK, like-for-like dispensing volume was up 4.1%.
Group sales for Alliance Boots were up 6%, or 6.6% in constant currency. Sales in its wholesale division were up 7.7% or 8.7% in constant currency.
The retailer said it continued to increase market share at Boots UK in its core health and beauty categories, which it attributed to a strong product offering and “excellent customer service”.
Categories that performed well included self-selection cosmetics, where it enhanced product ranges in new merchandising units, premium beauty, fragrances and beauty accessories. In September, it further developed its range of No7 skincare products with the launch of No7 Protect & Perfect Intense Day Cream with five-star rated UVA protection and sun protection factor 15.
In dispensing volumes, the retailer said growth was strong in the patient specific packs category and from prescriptions collected on behalf of patients from doctors’ practices. It also increased related income from pharmacy services, with the number of medicine check-ups carried out by our pharmacists increasing by 14% against the prior period.
During the period it has extended its partnership with Waitrose. 12 Boots stores now sell a combined Boots and Waitrose lunchtime offer and a further seven incorporate a larger range of lunchtime and convenience food, including the Essential Waitrose range.
Waitrose is selling Boots health and beauty products in 12 of its shops too. The retailer said initial results from the trials are “encouraging”.
In September it launched a kids clothing range in partnership with Mothercare, now sold in 370 Boots shops. In October it launched Treat Street, as revealed by Retail Week, whereby Boots Advantage Card customers collect points when they shop online with around 50 other brands.
Stefano Pessina, executive chairman, said: “In the last three years, we have made substantial capital investments in Boots in the UK to improve our stores and drive efficiency, while at the same time investing in our people. This has created a stable platform which, combined with our profit growth and strong cash flow, enables us to focus increasingly on international opportunities.
“We have made great strides forward to accelerate our growth plans in the past few months. I am delighted that we have become the majority shareholder in Hedef Alliance in Turkey and are acquiring ANZAG in Germany, both of which will make a significant contribution to future profitability.”
Andy Hornby, group chief executive, said: “We are pleased with the way the group has performed given the challenging trading conditions across Europe. Boots has delivered a good performance in a difficult UK consumer environment and we have increased market share in our core health and beauty categories. Our pharmaceutical wholesale division has performed strongly right across our international markets.
“Strong cash flow combined with the benefit of low interest rates has enabled us to reduce net borrowings while continuing to invest in the future of Alliance Boots. It is testament to all of our colleagues across the group that we continue to make such good financial and operational progress.”
Alliance Boots said it is “well positioned” for the second half which includes the important Christmas trading period. It said: “While government and consumer spending is under renewed pressure, we expect to deliver strong results for the full year, driven by our transformation programmes, our differentiated product offering, excellent customer service and international expansion through value-enhancing corporate transactions.”