Pharmacy2U reports £16m loss in 2018/2019
The online pharmacy giant Pharmacy2U has reported a loss in the 2018/2019 financial year following a significant equity investment.
Source: Dave Phillips
Pharmacy2U has reported a £16m loss in the 2018/2019 financial year — up £4m on the previous 12 months, according to its end-of-year accounts.
However, the online pharmacy said it started 2019/2020 in profit owing to a £40m equity investment made into the company at the end of March 2018.
The director’s strategic report said the equity would fund the development of a second automated dispensing facility to boost capacity, which is expected to reduce its operating costs and increase profits.
Pharmacy2U saw its revenue income increase by 41% to £60.7m in the 12 months to the end of March 2019.
In that time, the company reported an 80% growth in the number of NHS prescription items it dispensed, from 2,957,000 to 5,322,000, and a 21% growth in the number of NHS patients registered — from 273,000 to 331,000.
Gary Dannatt, chief operating officer at Pharmacy2U, wrote in the report that the company “is well positioned to deliver further growth of the core NHS repeat prescription service by accelerating the existing multi-channel marketing approach”.
“The group became profitable, pre-acquisition marketing, from April 2019, and expects profitability to increase throughout the remainder of the current financial year and beyond,” he said.
However, Dannatt admitted that competition from pharmacies, both nationally and online, was responsible for “business risks and uncertainties”.
He added that the “continuation of the current UK government’s focus on reducing the country’s budget deficit provides a higher level of uncertainty as to future reimbursement levels for NHS prescriptions”.
Asked to comment on its accounts, Mark Livingstone, chief executive officer of Pharmacy2U, told The Pharmaceutical Journal that its losses were “in line with expectations” and a result of spending increases on new infrastructure and dispensing capacity.
Pharmacy2U plans to open its new facility in Leicester in 2021, which is six times larger than its current facility in Leeds and will give the pharmacy the capacity to dispense 7.5 million items per month.
Livingstone added that the company was making “considerable progress towards profitability,” and that “the cost to service each customer continues to reduce as we scale further”.
“The equity investment has enabled us to increase our operational capacity and fund growth marketing, which has delivered the increased scale and efficiency needed to increase pre-marketing profitability,” he said.
Mike Dent, director of pharmacy funding at the Pharmaceutical Services Negotiating Committee, said: “All pharmacy businesses are facing significant financial challenges at the moment from a combination of rising costs, capacity issues and flat funding.”
Citation: The Pharmaceutical Journal DOI: 10.1211/PJ.2020.20207558
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