Pharmacy2U slashes its losses by £12 million
Pharmacy2U lost significantly less money in the year ending March 2020 than in the previous year, its latest annual report shows.
The 2019-20 Companies House filing for the UK’s largest online pharmacy shows it lost £3.8m, compared to a loss of just under £16m in 2018-19.
“During the year ended March 31 2020 the group made significant improvements in operational efficiency and leveraged the increased scale to improve gross margin,” the report says.
The report also says that “improved awareness of the Pharmacy2U brand” had led to a lower marketing cost per patient. The cost of recruiting new patients has long been a major barrier to profitability for the company.
Growth during pandemic
Meanwhile, revenue was up by 29 per cent in 2019-20, rising to £78.3m from £60.7m the previous year. This was driven by a growth in the patient base, a trend that has been accelerated by the coronavirus pandemic with 578,000 EPS nominations by January 21 2020 – up from 411,000 on March 13.
Its nearest rival, LloydsPharmacy-owned Echo, has gone from 182,000 patients to just under 360,000 in the same period.
UK lockdowns have sparked "unprecedented growth" in demand and led to Pharmacy2U running its dispensing facilities seven days a week for a number of months, according to the report.
While Pharmacy2U has at times come in for criticism from patients who experience issues with receiving their medication, the company argues it has “grown rapidly due to focus on providing an excellent customer experience,” saying it regularly listens to feedback from users.
Exceptional costs were higher in 2019-20, rising to £0.9m from £0.2m in 2018-19, something the company attributes to its restructuring efforts.
Plans for 10% of repeats market
Setting out its future plans, Pharmacy2U said it is “well positioned to deliver further growth of the core NHS repeat prescription business, and is striving to gain a much higher share of the NHS repeat prescription market by accelerating the existing multi-channel marketing approach”.
Its growth strategy includes plans for a new dispensing facility in addition to its Leeds site, expected to start operations before the end of the current financial year.
The company claims this will give it the capacity to dispense roughly 10 per cent of the repeat prescription market in England and will “transform” its operating costs through the use of new technology.
Pharmacy2U has been approached for comment.