In the first quarter of 2023, the number of “new buyer registrations rocketed by over 200%”, according to Hutchings Consultants’ 2024 UK pharmacy market update.
The specialist pharmacy broker’s new report revealed today (January 18) that this figure “settled as we progressed through the year, resulting in a 91% increase compared to the previous year”.
But the broker’s analysis found that “existing pharmacy owners with single branches completed most corporate acquisitions overall” across England, Scotland and Wales.
Read more: Revealed: 85% of pharmacy professionals want to buy or sell in 2024
Hutchings said that “many of these purchases were strategic in nature”, while first-time buyers “took advantage of the unparalleled market conditions”.
Last year, Lloydspharmacy sold its entire community pharmacy estate, while Boots set out plans to closed 300 branches.
These "large-scale corporate disposals...triggered a huge wave of enquiries and registrations”, Hutchings added.
Higher prices for independents
The report also revealed that there was “significant variance between the average prices achieved” for “risky and potentially problematic” corporate and “well-established” independent sales.
While the “oversupply” of pharmacies for sale contributed to a “downward pressure” in prices in 2023, sales of independent pharmacies “realised higher goodwill values than corporates across all three nations”, it said.
Read more: How two 23-year-old pharmacists snagged an ex-Lloydspharmacy branch
But Hutchings added that Scottish prices “continued to outperform those achieved in England and Wales”.
The broker found that Scottish independent pharmacy sales made on average £1.41 per pound compared to an average “hovering around £0.80p overall” in England and Wales.
2024 predictions
Hutchings’ report predicted that pharmacy goodwill prices will remain “consistent” through 2024.
It said that both “independent group operators and corporate owners will continue to…[make] disposals” resulting in “transaction volumes remaining high for the foreseeable future”.
Read more: What’s in store for the community pharmacy market in 2024?
The broker added, however, that prices will remain consistent “until either the supply of pharmacies on the market falls further” or the sector receives a “significant uplift” in funding.
Hutchings said that recent announcements, including the upcoming launch of Pharmacy First in England and the 5% funding uplift in Wales, are “already bringing a renewed degree of confidence from buyers as we move into 2024”.
“Making way for a younger generation”
Meanwhile, the broker revealed earlier this week (January 16) that Totty Pharmacy in an “affluent suburb” of Greenwich, London, was sold by husband-and-wife team Mr and Mrs Patel to first-time buyer Samson Akere.
Hutchings said that despite being “regarded very highly in their local community”, the couple decided to sell to make “way for a younger generation” and “spend more time with [their] children”.
Read more: David and Goliath: Small chains now run more pharmacies than large multiples
The pharmacy – which was “highly profitable” and in “superb condition” after a recent refit - was sold for an undisclosed price, but the broker revealed that it “attracted multiple offers resulting in a sale in excess of the original marketing price”.
Mr Akere said that he was “excited to develop the business”, which currently dispenses an average of 5,500 items per month, “to its full potential” while “enhancing its good reputation among existing customers [and] welcoming new ones with top-notch service”.
Read more: Lloydspharmacy confirms 'successful sale' of all community pharmacies
Hutchings consultant Matteo Mazza said that the pairing of buyer and seller for Totty Pharmacy was “of specific note” as “the Patels were hugely community focused and were keen to find someone to carry their work forward”.
First-time buyer Mr Akere “was eager to do exactly that while also injecting a new lease of energy into the business [so] was exactly what they were looking for”, he added.
