Pharmacy2U goes back to making a loss after two-year blip
Pharmacy2U’s latest accounts show that it made a pre-tax loss of £5.6m in the year to March 31 2023, breaking a two-year trend of making profits.
The distance dispensing pharmacy published its 2022-23 accounts on January 13, revealing that the company made a total loss of £5.2m in the 2022-23 tax year despite revenue growing by five per cent from £165m to £173m and NHS patient nominations rising by 11 per cent to 736,000.
Pharmacy2U directors said in the Companies House report that the business made efficiencies in the 2023 tax year, such as cutting its distribution costs by 20 per cent from £40.2m to £32m and reducing its wage bill from £14.3m to £13.8m.
“Improved awareness of the Pharmacy2U brand led to a lower marketing cost per patient,” it added.
However, “these efficiency gains were more than offset by a lower level of gross profit generated in the year,” with gross margin reductions caused by the NHS clawing back pandemic-related “overfunding” during the 2022-23 tax year.
This marks an end to two years in which, according to its ‘pre-tax’ measure, the company made profits - £3.2m in 2021-22 and £126,000 the year before – after running losses in every year since launching in 2000.
The accounts indicate a significant increase in the company’s current borrowings, up from £5.8m in 2021-22 to £12m in 2022-23. Net assets were down year-on-year from £22.8m to £17.6m.
‘Positioned for further growth’
In the report, Pharmacy2U directors said the company “has traded strongly since the year-end” and is “well positioned to deliver further growth of the core NHS repeat prescription business,” with rising prescription volumes expected to “generate cost savings”.
“A number of strategic partnerships have been agreed in the past year which, in combination with existing marketing expertise, will allow the company to continue its growth journey,” the directors said.
“Operational performance and customer service levels have also remained very strong throughout this period,” they added.
The company, which announced this week that it will offer online appointments for six of the seven conditions included in Pharmacy First, said it sees itself playing “a significant role in the development and provision of pharmacy services” such as vaccinations.
Commenting on the Competition and Markets Authority’s investigation into Pharmacy2U’s October acquisition of Metabolic Healthcare, which was formerly LloydsPharmacy’s distance dispensing arm, the directors said they “are fully collaborating with the CMA throughout the process and are confident that the CMA will decide to approve this transaction”.
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