1 / 14

Boots Group PLC

Boots Group PLC. Trading and corporate development update. 7 th April 2005. Sir Nigel Rudd. Chairman. Richard Baker. Chief Executive. Headlines. BTC and Group performance for 04/05 expected to be in line with revised market forecasts

ziazan
Download Presentation

Boots Group PLC

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript

  1. Boots Group PLC Trading and corporate development update 7th April 2005

  2. Sir Nigel Rudd Chairman

  3. Richard Baker Chief Executive

  4. Headlines • BTC and Group performance for 04/05 expected to be in line with revised market forecasts • Lower consumer spending and infrastructure costs expected to lead to lower BTC operating profits in 05/06 • Proposed sale of Boots Healthcare International • Continued return of cash to shareholders

  5. 04/05 Trading update • BTC • Operating profit expected to be in line with March update at £470m • Weak sales in Q4 • Gross margin % -80bp for the year • BHI • Operating profit slightly ahead of expectations at £85m • Group • PBT in line with revised market expectations at £475m Note: All trading results estimated at time of going to press

  6. Boots The Chemists • Tougher retail environment underlines need to change • Improved competitive position in increasingly competitive market • Good progress on renewing operational infrastructure • Moving from unsustainable model to modern, competitive and efficient model

  7. Planning assumptions for 2005/06 • Sales growth expected to remain subdued • LFL growth 0 – 2% • New space contribution 2% • Stable gross margin expected • Continued investment in price • Cost of Goods improvement • Costs expected to be up 6% due to new space and infrastructure renewal

  8. BTC cost growth

  9. Intention to sell BHI • BHI concluding successful 4 year growth strategy • Strong organic growth prospects but significant investment required • Focus Group resources on making BTC modern, competitive and efficient • Completion within 05/06 financial year • Intention to return significant proportion of proceeds to shareholders

  10. Boots Healthcare International • 2004/05 sales £520m, +5.7% on a comparable basis • 2004/05 operating profit £85m • Operating in 130 countries with 2,900 staff • 5 manufacturing plants Nottingham (3), Germany and Thailand Other £140m Nurofen £150m Dermo- Cosmetics £50m Strepsils £90m Clearasil £90m Note: All trading results estimated at time of going to press

  11. Proposed sale and leaseback • 300 secondary properties identified • Expect proceeds in excess of £250m • Plan completion over the summer • Broadly EPS neutral • Proceeds used to pay down short term borrowings

  12. Capital structure and shareholder returns • Clear ongoing commitment to return surplus cash • £1.7bn returned to shareholders over the last three years • Significant proportion of BHI proceeds to be returned to shareholders • 2nd £350m tranche of share buyback to be completed over two to three years – matched to BTC performance • Dividend key element of delivering shareholder returns • Maintain strong investment grade debt rating

  13. Summary • BTC and Group performance for 04/05 expected to be in line with revised market forecasts • Lower consumer spending and infrastructure costs expected to lead to lower BTC operating profits in 05/06 • Proposed sale of Boots Healthcare International • Continued return of cash to shareholders

  14. Boots Group PLC Trading and corporate development update

More Related