Baker encouraged by sales figures
Boots Group revealed a 10 per cent fall in profits this morning as a result of chief executive Richard Baker's attempts to modernise the business.

Pre-tax profits for the six months to September 30 fell£17 million to£163 million as investment in modernising stores and more competitive pricing took its toll. Operating costs were up 6 per cent and gross margin was down 0.3 per cent.

Total group sales were up 0.8 per cent to£2.6 billion, while at the core Boots the Chemists chain, total sales were up 1.1 per cent, with like-for-likes down 1.3 per cent.

The retailer said that underlying like-for-likes were broadly flat if the impact of regulatory price changes in dispensing was stripped out.

However, customer traffic was down 3 per cent, and a good performance in beauty, toiletries and health was dragged down by a poor performance in lifestyle products. Boots Opticians continued to struggle, with both total and like-for-like sales down by more than 10 per cent. International sales were up 13.3 per cent.

Boots is in the midst of a£7 billion merger with Alliance Unichem and is also selling its Boots Healthcare International arm to Reckitt Benckiser.

Baker described the sales figures as encouraging. 'The investment and energy that has been put into our core health and beauty businesses is delivering results,' he said.