02 May 2007

Preliminary results announcement for the year ended 31 March 2007

Alliance Boots plc, the international pharmacy-led health and beauty group, today reports preliminary results for the year ended 31 March 2007 which demonstrate that the Group has achieved its key priorities, delivering a strong set of results in line with management's targets.

Highlights:

  • Our key profit measure pro forma adjusted earnings up 11.5% year on year*
  • On track to deliver promised merger cost synergies
  • Retail Division
    - good revenue growth
    - UK trading margin ahead of management's previous expectations
    - Boots branded Health & Beauty business increased profits for first time in five years
    - biggest expansion of Boots pharmacy brand to commence shortly
  • Wholesale Division
    - performed well - reflecting strength of geographically diverse portfolio
    - successfully implemented Pfizer sole logistics service contract in UK
    - Chinese market entry agreed, subject to regulatory approval for the joint venture

Commenting on the results, Richard Baker, Chief Executive, said:

"We have delivered a strong financial performance while executing one of the biggest mergers undertaken in the UK. Across the Group we have seen the positive impact of our pre-merger planning, our new working relationships and our dedicated people all contributing to the good results.

"The results reaffirm our belief that in Alliance Boots we have created a leading international pharmacy led health and beauty group with attractive prospects and opportunities."

Group highlights - pro forma

To assist investors in understanding the performance of the Group, pro forma financial information has been prepared to show the results from continuing operations of the Group as if the two former groups had always been combined as was provided at the announcement of the Group's interim results on 14 November 2006. The pro forma revenue and profit statement for continuing operations has been prepared on an adjusted basis, which means before exceptional items, amortisation of customer related intangible assets and IAS 39 timing differences, all net of tax, and deferred tax restatements for customer related intangible assets.

 Detailed pro forma financial information, including the basis of preparation, is set out in the "Additional pro forma financial information for continuing operations" section of this announcement.

Revenue up 3.6% to £14,608 million (2005/06 £14,096 million)
Trading profit1 up 6.3% to £641 million (2005/06 £603 million)
Underlying trading profit2 up 7.4% to £641 million (2005/06 £597 million2)
Adjusted earnings3 up 11.5% to £467 million (2005/06 £419 million)
Adjusted earnings per share4 up 11.4% to 48.7 pence (2005/06 43.7 pence)


 

  1. Trading profit comprises profit from operations before exceptional items and amortisation of customer related intangible assets and share of associates' post tax earnings
  2. Underlying trading profit is after adjusting the previous year's trading profit to include a full year's rental charge on the 312 retail outlets which were sold and leased back in July 2005, so that the trading profits for both years are on a comparable basis
  3. Adjusted earnings comprises profit for the year attributable to equity shareholders before exceptional items, amortisation of customer related intangible assets and IAS 39 timing differences, all net of tax, and deferred tax restatements for customer related intangible assets
  4. Adjusted earnings per share comprise adjusted earnings divided by the pro forma weighted average number of shares in issue during the year of 959 million (2005/06 958 million)

Group highlights - statutory

The statutory financial results for the year ended 31 March 2007 contain a full year of results for the former Boots Group PLC businesses and eight months results for the former Alliance UniChem Plc businesses on an acquisition accounting basis. The comparative figures contain only the results of the former Boots Group PLC businesses and include within "Profit for the year attributable to equity shareholders" a £1,470 million profit after tax from discontinued operations.

 

Revenue - continuing operations £11,502 million (2005/06 £5,027 million)
Profit from operations - continuing £480 million (2005/06 £369 million)
Profit for the period attributable to equity shareholders £387 million (2005/06 £1,774 million)
Basic earnings per share - total 48.4 pence (2005/06 259.4 pence)
Basic earnings per share - continuing 45.8 pence (2005/06 44.4 pence)

Key reconciliations between pro forma and statutory financial results are provided after the "Additional pro forma financial information for continuing operations" section of this announcement.

Details of exceptional items are shown after the "Key reconciliations between pro forma and statutory financial results" section of this announcement.

A glossary of key terms and principal businesses and associates by segment is provided at the end of this announcement.

Sir Nigel Rudd, Chairman, Richard Baker, Chief Executive and George Fairweather, Group Finance Director, will host a conference call for analysts at 08.00 UK time on Wednesday 2 May 2007.

UK dial in number: 020 7190 1596
International dial in number: +44 20 7190 1596
Quote conference title: Alliance Boots Preliminary Results

A replay facility will be available for seven days:

UK dial in number 020 7190 5901
International dial in number: +44 20 7190 5901
Access number: 135735#

For further information, please contact:

Investor Relations
Gerald Gradwell/Chris Laud Tel: +44 (0) 20 7138 1168
Media
Donal McCabe Tel: +44 (0) 20 7138 1164

 

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