Boots has recorded a fall in its full-year profits as its sales and margins were eroded by stiff competition from its rivals.

The health and beauty retail giant recorded a 20% decline in pre-tax profits year on year to £398m in 12 months to August 31, 2018, while operating profit fell 22.3% to £391m.

The retailer’s revenue slipped 0.8% to £6.7bn during the period.

Boots attributed the decline to increased competition hitting margins across its retail division, while its pharmacy income was hit by “governmental agencies seeking to minimise increases in the costs of healthcare, including pharmaceutical drug reimbursement rates”.

It closed a net one store during the year, ending the financial period with a store estate of 2,485.

The number of active users on the retailer’s Advantage Card loyalty scheme slipped 1.4% to 14.4 million.

Boots’ most recent full-year results come shortly after parent company Walgreens slashed the group’s earnings forecasts following the “most difficult quarter” since the Walgreens Boots Alliance was formed in 2014.

Boots UK managing director Seb James has kicked off an overhaul of the retailer’s store estate and bolstered its brand portfolio since taking the reins, including partnerships with cult favourites including Fenty Beauty, in a bid to win back relevance with beauty shoppers.