Britannia Pharmacy’s pre-tax profit dipped by 96% to just £22,691 in 2023 as the independent multiple said it was “reeling from the aftermath of the pandemic”, its financial reports published on Companies House this month (June 5) have revealed.

While Britannia reported a 14% rise in its sales, lifting its turnover in the year to £36 million, it said that the “huge rise in the rate of inflation is taking its toll”, in its accounts for the year ending in August 2023.

It added that its overheads had been “mainly” affected by increased staffing costs, fuel bills and stock expenses.

Read more: Kamsons sees 16% sales lift but warns margins under ‘significant pressure’

Britannia said that the government funding crunch meant that it was “continuing” in its decision “not to acquire any further branches”.

And it added that the government must provide “additional funding” if the community pharmacy sector is to be expected to “continue providing NHS dispensing services”.

 

Minimum wage “major impact”

 

The independent chain paid particular attention to labour issues in its strategic report.

It said that two consecutive rises in the national minimum wage will have “a major impact on staffing costs in future years” as it called on the government to increase its funding for “this particular aspect”.

And Britannia flagged the “employment of pharmacists within doctors' surgeries and primary care networks (PCNs)” through the additional roles reimbursement scheme (ARRS) as having the effect of “increasing overheads without new additional revenues”.

Read more: 'Strategic acquisitions': Cohens buys seven pharmacies amid nearly £6m loss

The pharmacy group employed 301 staff including directors during 2023 at a total cost of £6.2m, up 13% from the previous year, according to the report.

It paid out no dividends and the directors’ aggregate remuneration was £323,400 in the year, it said.

 

2024 return to profit?

 

While Britannia’s profitability took a knock in 2023 - after tax, its losses were £192,693 - it did not express worries about remaining a going concern. 

It said that its management accounts after the end of the financial year “show continued profitability” and noted that at year-end its net current assets were £3.8m.

Britannia also expressed confidence about its debt, stating that it is “not too heavily geared”, with “no significant concentrations of credit risk”.

Read more: Weldricks posts £1.4m loss amid funding ‘war of attrition’

Meanwhile, its directors also own a wholesaling company and it declared £6.2m in purchases from “companies under common control”, the report said.

It reduced the amount it owed its directors to £33,866 from £267,052 in the year, it added.

 

Chain malaise

 

Earlier this month, C+D reported that 85-strong pharmacy chain Kamsons had seen its profits drop to £2.8m in the 2023 financial year despite an uplift in sales revenue, much of it from its purchase of eight new branches.

Kamsons professional development manager Mark Donaghy told C+D that it is “fundamentally wrong” that such a “well-run and established” chain’s margins are “under such significant pressure”.

He added at the time that Kamsons is “struggling” to maintain its profitability “like all pharmacies”.

Read more: Paydens ‘focused’ on meeting sector challenges amid £6m loss in 2023

In May, Boots posted positive figures, as it increased both pharmacy and retail sales with pre-tax profits rising from £4m to £60m over the last financial year.

But the same month, C+D reported that multiple Cohens had suffered a £5.7m loss for the financial year, all the while increasing its total turnover by £21m to £253m in the year.

Similar 2023 losses have been posted by independent multiple H. I. Weldricks, which posted a £1.4m loss after tax in March, and Paydens Pharmacy, which revealed in February that its 2023 loss of £6.4m was “directly caused by the flat rate of pharmacy funding”.