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LloydsPharmacy parent company reveals 19% fall in quarterly profits

McKesson, the parent company of LloydsPharmacy, has reported an adjusted operating profit of US$43m in the past three months — 19% less than the profit made in the same financial quarter in 2018/2019.

The figure was published as part of McKesson’s second quarter financial results for 2019/2020 on 30 October 2019.

The company, which also owns the wholesaler AAH Pharmaceuticals, said the profit decline was “due to continued weakness in the UK retail pharmacy environment”.

Brian Tyler, chief executive at McKesson, said the company’s UK business has “experienced industry-wide underfunding by the NHS”.

However, he added that the company “did see a nominal tariff increase in the month of August [2019]” and expects “a further upward tariff revision later this fiscal year, which should result in a partial recovery of the underfunding we’ve experienced [in the] year to date”.

Nevertheless, the company is now forecasting “flat to low-single-digit decline” in its revenues for the rest of the 2019/2020 financial year and has changed its forecasted operating profit from “low-end of low to mid-single digit growth” to “low-single-digit growth”.

In October 2017, LloydsPharmacy announced plans to close nearly 200 pharmacies because clawbacks had made them “commercially unviable”, with the potential for “further closures” suggested by the company in May 2019.

In October 2019, Walgreens Boots Alliance, parent company of Boots UK, said it had already closed 18 of its stores, with a further 182 to close by August 2020.

Citation: The Pharmaceutical Journal DOI: 10.1211/PJ.2019.20207272

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