Alliance Boots soars 10% and dismisses tax critics
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Your support makes all the difference.Alliance Boots has shrugged off complaints about its tax affairs and showed it is resisting the recession and the wider slump on the high street with elan.
The drugs giant behind the famed chemists saw sales up 18 per cent to £23bn in the year to March, while profit soared 10 per cent to £693m.
Boots, based in Zug, Switzerland, since its £11bn takeover by private equity in 2007, pays only around £60m a year in tax.
That is about a third of the rate of tax paid by rivals such as Tesco, leaving the company open to criticism that it is not a good corporate citizen.
Chairman Stefano Pessina, the Italian billionaire who led the takeover deal, recently complained that the UK obsession with tax was bad for business. His finance director, George Fairweather, yesterday insisted that the company does the right thing.
He said: "You've got to put it into perspective. We are investing in the business and paying down debt.
"A lot of people forget that the tax rate has come down. In the year before the company was taken private, it was 30 per cent, now it is 26 per cent. The Government has chosen to take the tax rate down."
Asked why Boots pays less than other high street giants, he replied: "It is not for me to comment on the tax of others. We pay all of our taxes."
The UK arm saw sales hold steady at £6.3bn. Total sales were down 0.2 per cent while like-for-likes slipped by 1.1 per cent.
Matt Piner, at retail experts Conlumino, said: "Boots will generally be pleased with its performance.
"However, with sales falling, it appears even the traditionally resilient health and beauty markets are coming under pressure.
"The health division was much weaker, with revenue dropping 2.4 per cent to £891m.
"Boots claims that this was essentially down to external factors, namely significantly lower levels of cough and cold-related illnesses dampening sales of non-prescription medicines."
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