Boots sells OTC division to return to retail roots
Boots Healthcare International, which makes over-the-counter medicines, is to be sold by Boots Group Plc, leaving the company with retail operations only and associated support services.
The decision was announced side by side with the company’s second
profit warning in five weeks. Boots expects to return “a significant
proportion” of the sale price to shareholders. It will do this
through paying dividends and buying back its own shares for cancellation
as a means of boosting the share price.
The sale is so that the company can
concentrate on modernising Boots The Chemists. Boots is also to sell
the premises of 300 of its smaller stores and lease them back as a way
of releasing capital tied up in
property.
A company statement said that the overall capital structure of the group
is to be managed to achieve the most appropriate balance sheet for the
business of Boots The Chemists.
Chief executive Richard Baker said: “It is clear that we are now,
and will be for the foreseeable future, operating in a much more difficult
trading environment in which sales growth will be hard fought for and
cost pressures will continue to rise.” |
The
Pharmaceutical Journal
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