Cosmetics drive Alliance Boots results

By Katie Bird

- Last updated on GMT

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Alliance Boots has announced significant growth last year driven by
strong health and beauty sales and cost cutting measures.

The UK pharmacy and beauty manufacturer reported revenues of £15.304bn for the year ending March 31 2008, an increase of 4.8 per cent on last year's results. Trading profit for the company increased by 20.3 per cent to £771m and EBITDA reached £1,027m, an increase of 17.9 per cent. Improved efficiency from privatisation ​ Executive Chairman Stefano Pessoria highlighted improved efficiency as a driver behind the growth. He said becoming a private firm had allowed Boots to reallocate and refocus management time, to step up product development and instigate other efficiencies that would have been difficult to do as a listed company. In addition, Pessoria noted the particularly strong performance of the Health and Beauty division that reported revenue of £6.845bn, a 4.2 per cent increase on last year's figures. Trading profit increased 20.1 per cent to reach £603m and trading margin increased 1.2 percentage points to 8.8 per cent. Own brand No7 remains strong ​ Sales of cosmetics and fragrances were particularly good and within the sector No7 experienced strong year on year growth. The growth of the No7 brand can be partly attributed to the success of the Protect and Perfect anti-ageing serum that gained fame after appearing on a BBC Horizon program last year. Looking at the international performance of the company, Ireland and Thailand have been the most positive of the non-UK markets. Revenue in Thailand came in at £47m an increase of 5.2 per cent on a like for like basis, and the company noted the proportion of locally sourced Boots products has continued to increase which has helped margins. Product sourcing in Thailand for other regions is now being explored as an option to increase margins. Likewise Ireland reported a 10 per cent increase on a like for like basis on the basis of revenues worth £184m, with the cosmetic and fragrances category again performing particularly well. Future looking bright for Boots ​ Looking to the future, Pessario remained confident about the outlook saying that the real potential of the company was only now beginning to come to light, potential that has not yet been fully unlocked. "We remain confident about our prospects for the year ahead, despite the weaker outlook for overall consumer spending in the UK, as the benefits of refocusing and management efforts continue to enhance the performance of our business,"​ he said.

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