{"id":38126,"title":"Pharmacy Sector Sees Major Consolidation as One in Ten Shops Change Hands","publisher":"Stockmark.IT","author":"Stockmark.IT Website","published":"2024-12-30T03:45:23+00:00","modified":"2024-12-29T23:34:32+00:00","canonical_url":"https://stockmark.it/pharmacy-sector-sees-major-consolidation-as-one-in-ten-shops-change-hands/","markdown_url":"https://stockmark.it/pharmacy-sector-sees-major-consolidation-as-one-in-ten-shops-change-hands.md","json_url":"https://stockmark.it/pharmacy-sector-sees-major-consolidation-as-one-in-ten-shops-change-hands.json","category":"Health","categories":["Health","Healthcare","Pharmaceutical"],"featured_image":"https://i0.wp.com/stockmark.it/wp-content/uploads/pharmacyuk.jpg?fit=1024%2C576&quality=89&ssl=1","format":"news","language":"en-GB","content":"The UK pharmacy sector witnessed a significant wave of consolidation as nearly one in ten pharmacies were acquired through mergers and acquisitions in the 12 months to June 2024, amid mounting profit pressures and rising operational costs.\n\nData from accounting group UHY Hacker Young reveals the number of pharmacy acquisitions surged by 50 per cent, from 809 to 1,212, affecting 9 per cent of the nation’s 13,280 pharmacies. The sector endured a substantial £500 million hit to profits during this period, with gross profits per pharmacy declining 10 per cent from £419,598 to £382,468 annually.\n\nLloydsPharmacy, owned by German private equity firm Aurelius, contributed significantly to this trend by divesting portions of its 1,054-store portfolio. Aurelius, which acquired the chain for £477 million in 2021, implemented the divestment strategy as part of its restructuring programme.\n\nJohn Lerston, pharmacy services and tax planning adviser at UHY Hacker Young, highlighted the increasing challenges faced by independent pharmacies. “Lower gross margins under the NHS contract, rising wage costs due to the cost-of-living crises, and changes in the minimum wage and national insurance rates are squeezing margins,” he explained.\n\nThe sector’s upheaval has extended to major players, with Boots’ parent company, Walgreens Boots Alliance, reportedly in discussions with New York-based private equity firm Sycamore Partners. Previous attempts to divest Boots, including a potential £7 billion London listing and a £5 billion joint bid from Apollo Global Management and Reliance Industries, failed to materialise.\n\nThis consolidation trend shows no signs of abating, suggesting further structural changes in the UK pharmacy landscape as businesses grapple with economic pressures and evolving healthcare delivery models."}