Boots' revenues from its Boots Opticians stores and from its growing network of 8 LASIK clinics rose by 12.4 percent in the 6 months ended Sept. 30, with an 8.8 percent boost on a comparable basis. Their suddenly improved performance contributed to a 22.1 percent sales increase to £130.4 million (e204.6m-$206.6m) in the Boots retail group's ?Wellbeing Services? division, which also includes dental care, cosmetic work, supplementary medicines and health centers.
Dental care services more than doubled their turnover to £10.9 million (e17.1m-$17.3m). Nevertheless, the division, which was placed under new management about 6 months ago, posted an operating loss of £16.1 million (e25.3m-$25.6m)for the period, up from £15.9 million a year ago. Boots Opticians is profitable, according to company officials, but it seems that the diversification into dentistry and other operations is not yielding the expected results.
Boots says it will announce next Jan.21 its future plans for the division. Speculation is that it may shed the dental care business, as SpecSavers did a couple of years ago. As part of an ongoing strategic review, Boots has already sold its Halfords bicycle retailing chain and it has now decided to stop the further development of a new chain of cosmetics stores, Pure Beauty, which was supposed to be expanded from 6 to 65 sites.
An extraordinary loss of £128.6 million on Halfords' disposal was offset by an exceptional interest credit, so the group's net income declined only slightly in the latest 6-month period to £136.5 million (e214.6m-$216.8m) from £164.5 million in the year-ago period. Operating earnings rose slightly to £269 million (e423m-$427m). The management is promising savings of £100 million (e157m-$159m) over the next 3 years after several productivity measures over the past 3 years that have yielded annual savings of £250 million (e393m-$397m). Future savings will be reinvested into lower pricing, store investments and new product development.