The online pharmacy business dispatched more than 5.3 million NHS prescriptions from April 2018 to March 2019, a 80% increase on the previous financial year, according to documents filed with Companies House earlier this month.
The business – founded in 1999 and positioning itself as the largest online pharmacy in the UK – made “significant progress reduc[ing] operating costs” in 2018-19, it said, which “largely mitigated” the impact of the pharmacy funding cuts in England.
It attributed its £16m loss to “significantly higher investment in NHS acquisition marketing”, it said in the document.
The latest loss is greater than the business's £12.1m loss in 2017-18, but less than its £20m loss in 2016-17, according to its past financial reports.
Predicting profitability
Despite its losses, Pharmacy2U claimed in the documents that it “became profitable” in April 2019, and “expects profitability to increase throughout the remainder of the current financial year and beyond”.
“The group is well positioned to deliver further growth of the core NHS repeat prescription business,” it said in the document.
A £40m equity investment secured in March 2018 “will allow the group to gain a much higher share of the NHS repeat prescription market by accelerating the existing multi-channel marketing approach”.
Investing in automation
This investment will also be used to fund the development of a second automated dispensing hub – for which Pharmacy2U entered into a £7.5m contract last year.
This will “provide the required operational capacity, further reducing operating costs and improving profitability”, Pharmacy2U stated.
It also used the report to highlighted the “difficult economic market” and “competition from national internet pharmacies” as key business risks for the future.
Last year, the former CEO of Well Pharmacy exclusively told C+D that the multiple was prompted by online business Pharmacy2U’s “rapid growth” to “accelerate” its own digital plans.