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Beauty range gives welcome tonic to Alliance Boots

A mild winter for coughs and colds and pressure on prescription income failed to stop Alliance Boots lifting profits in UK health and beauty.

The group, which has more than 2,500 UK stores, was helped by demand in beauty and toiletries as last year's launch of its exclusive Champneys range of bath products helped revenues in this area lift 2% to £2.15bn.

Across UK retail, profits were 5.2% higher at £750m, although sales were down 0.3% at £6.37bn for the year to March 31, driven by a 1.6% drop in dispensing and related income to £2.37bn.

While it dispensed more prescriptions than a year ago at 224m items - up 1.9% on a like-for-like basis - Boots faced further reductions in reimbursement rates set by the Government.

It was also affected by more branded medicines losing patent protection and being substituted by cheaper rivals.

In the retail health category, revenues fell by 2.4% to £891m due to strong competition and lower volumes of cough and cold remedies after a quieter winter for such ailments. The pharmaceutical wholesale division, which supplies medicines to more than 160,000 pharmacies, doctors, health centres and hospitals in 21 countries, saw revenues surge 27.9% or 2.4% on a like-for-like basis. Group-wide profits were up 10.2% to £693m.

The company, which was taken private in an £11.1bn takeover in 2007, employs around 75,000 staff in the UK.

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