Rowlands shrinks its losses by 80pc during Covid
Rowlands Pharmacy lost £11.6m in the 12 months to January 31, over 80 per cent less than it lost in the previous year, its latest accounts reveal.
Rowlands’ latest Companies House filing, published yesterday, show the company managed to shrink its losses after taxation by 83.8 per cent compared to its £71.3m loss in 2019-20.
While turnover took a 2.8 per cent dip from £455m to £442m, gross margin improved, rising from 27.64 per cent to 30.32 per cent. Operating losses shrank by 99.8 per cent, from £64.8m to £113,000.
The report says the fall in turnover “principally reflects the impact of reduced prescription volumes and the consequent reduction in footfall and OTC sales,” as well as the company’s decision to axe a number of stores.
Meanwhile, gross margin was helped by “additional Government funding to compensate for the additional cost and cash flow burden of the pandemic”.
The report refers to the company’s “retail transformation programme… to return the business to profitable growth”. This includes the sale of a number of stores, mainly in England, “to allow the business to focus its investment and growth plans in a slightly smaller network aligned with the NHS 10 year plan”.
“Management are confident that the sale of the stores held for sale will complete in the next 12 months," the accounts state. Pharmacy Network News has approached the company for more information on recent and upcoming closures.
The report cites staff costs a “key expense” that must be “managed closely”. Average staff numbers have reduced by 6.8 per cent, down from 4,196 to 3,911. This has been done through divesting stores and making other “efficiency savings,” with the figures pointing to a 0.1 per cent reduction in personnel costs to £74.8m.
The report also says the company “is currently working on an ongoing people plan project which is aimed at developing highly effective colleagues that are not only more efficient and productive but also fully aligned with the company’s mission, vision and values”.
On the challenges posed by the Covid-19 pandemic, the report says: “We have coped with increases in demand by focusing on the needs of our customers, the welfare of our staff, acquiring stock and temporarily redeploying some head office staff to work in branches.”
The chain is fully owned by the Mannheim-headquartered Phoenix Pharmahandel, which has committed to make funds available to meet Rowlands’ liabilities until April 30 2022. Its four directors – who have chosen not to pay themselves a dividend this year – say they have a “reasonable expectation” that the company will be able to continue for the foreseeable future.
Rowlands Pharmacy has been approached for comment.