| 6 months to 30th September 2005 (£m) | Sales | Trading Profit | ||
|---|---|---|---|---|
| Boots The Chemists | 2,196 | +1.1% | 164 | -18.6% |
| Boots Opticians | 83 | -10.5% | (5) | |
| Boots Retail International | 28 | +13.3% | (2) | |
| Boots Healthcare International | 265 | +8.5% | 47 | +28.1% |
| Group & other | 22 | +8.2% | (24) | |
| Group sales and trading profit | 2,594 | +0.8% | 180 | -10.0% |
Net financing costs |
(17) | |||
| Trading profit after financing costs | 163 | -9.6% |
Thanks Richard and good morning everybody.
I would like to start with a summary of group results for the first half of the year which are presented for the first time in accordance with International Financial Reporting Standards. I recognise that this makes some of the statutory figures a little less familiar. I have, therefore, tried in this presentation to simplify the figures as much as possible to give a clearer view of business performance. I have provided a detailed reconciliation to the statutory figures in the news release.
Group sales were £2,594m, up 0.8%. Trading profit after financing costs was £163m, £17m or 9.6% lower than last year. This reduction reflects a £45m increase in operating expenses as a result of the planned investment in Boots The Chemists.
Looking at the elements of the Group in turn. Boots The Chemists profit was £37m or 18.6% lower than last year owing to planned investment in the infrastructure of the business. I will review BTC's performance in more detail in a few moments.
Boots Opticians has had a difficult first half with disruption arising from the integration into BTC coming on top of a very tough market which has been particularly hit by the downturn in discretionary spending. This has resulted in sales down 10.5% and a loss of £5m for the first half.
Boots Retail International has had a very good first half with sales up 13.3%. The trials with Target and CVS in the states are progressing well and have been extended to 150 stores and we have recently announced plans to open Boots stores in the Middle East.
Despite the potential distraction provided by the proposed sale, Boots Healthcare International has had a very strong first half with sales up 8.5% in total or 8.6% in local currency. Each of the three major brands showed good growth in the half year.
Group costs were £24m, almost a quarter lower than last year's number due to the favourable phasing of certain costs.
Net financing costs in the half were unchanged at £17m.
