Alliance Boots Posts Strong Profits Thanks to Merger, Beauty and Toiletries

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LONDON – Alliance Boots reported Wednesday that aftertax profits hit 387 million pounds, or $725 million at average exchange, for the year ended March 31. In the prior-year period, profits were 1.77 billion pounds, or about $3.1 billion, on the back of Boots Group’s 1.93 billion pound, or $3.6 billion, sale of Boots Healthcare International.

Aftertax profits from continuing operations rose 20 percent year-over-year, to 366 million pounds, or $685 million.

The company, which was formed in July following the merger of Boots Group and Alliance UniChem and is now the subject of an acquisition bid from private equity firm Kohlberg Kravis Roberts, said its adjusted earnings hit 467 million pounds, or $875 million, an increase of 11.5 percent year-over-year.

Revenues gained 3.6 percent, to 14.61 billion pounds, or $27.4 billion, the company said.

“We have delivered a strong financial performance while executing one of the biggest mergers undertaken in the U.K.,” Richard Baker, the firm’s chief executive officer, said in a statement.

In the U.K., Alliance Boots’ beauty and toiletries category’s sales spiked 5.4 percent, to 1.73 billion pounds, or $3.2 billion.

The company highlighted the continued growth of its No. 7 brand, one of a plethora of its own labels, noting there was “unprecedented demand” for the No.7 Protect and Perfect Beauty Serum after it was featured on a BBC television program. A waiting list of more than 100,000 customers has since formed for the product.

In a separate release, the company said it had introduced a special customer care team and it would open four flagships in the U.K. at 7 a.m. on Friday to deal with demand for the serum, which sold out after being lauded on the show for its antiaging benefits.

“We’ve heard many stories as to why women should be [at the] top of the list to receive the serum, including, ‘It’s my son’s wedding in three months’ time,'” Graham Hardy, head of customer care, said in the statement.

Alliance Boots said it expected “the good trading performance it has seen in 2006-07 to continue in the current financial year.” If approved by shareholders, the acquisition of Alliance Boots could be completed by July.