Perthshire firm Davidsons Chemists plans to increase sales by up to £10 million this year.
The Blairgowrie business has more than 50 pharmacies across Scotland, including five it acquired from Lloyds earlier this year.
It took over two Lloyds pharmacies in Dundee – Menzieshill and Lochee – as well as stores in Auchterarder, Kirriemuir and Montrose.
Managing director Allan Gordon did not rule out acquiring more of the Lloyds portfolio as it aims to hit sales of between £65 million and £70m this year.
He said: “I know about 20 of the Lloyds estate has gone back on the market because some deals fell through.
“I wouldn’t rule out us looking at any of them. I’m aware of a few that might be of interest to us.”
Mr Gordon said they had taken some work to bring them up to the Davidsons standards.
He said: “They are all doing well but they’re not the finished article yet. It’s just about us bedding them in.”
A ‘challenging’ year for Davidsons Chemists
Mr Gordon was speaking as newly published accounts for Walter Davidson & Sons Limited show turnover of more than £60m for the year to the end of January 2023.
That represents a rise of more than £7m from the year previous.
He said: “Our turnover for 2022 hit £60m and I think for 2023 we’ll be looking at somewhere between £65m and £70m.”
Meanwhile it reported pre-tax profits of £3.1m, down from £4.9m in 2022.
Mr Gordon acknowledged it had been another “challenging” year for the business.
He said: “The eccentricities of the funding model for community pharmacies mean we tend to have a good year and a bad year.
“In 2022 our profitability was well down but I’m expecting it to bounce back in 2023.
Davidsons Chemists now employs 600 staff. The accounts show its wage bill for the year was more than £11m, up from £9.1m in 2022.
Mr Gordon said rising wage bills had been another issue for the business.
“We’ve not had issues with recruitment or retention, but it was challenging in terms of ensuring we pay our staff as highly as we can.
“Wage inflation is settling a bit but that’s been a challenge for all businesses.”
Coping with rising energy bills
Mr Gordon said the firm’s results were largely unaffected by rising energy bills, though their impact has been felt in the current financial year.
“Even though the prices of energy was going through the roof, we had fixed prices for most of last year,” he said.
“When that contract ended, our energy bills doubled. That’s something in the region of another £500k.
“It’s not going to mean the closure of any of the pharmacies – it’s just something we’ve got to take on the chin.”
However, he said the firm had invested in new prescription lockers. Two were installed at pharmacies last year, and another three added this year.
Each of the lockers – which allow customers to enter a pin code to access their medication – come at a cost of about £40,000.
Mr Gordon said: “We’ve had a lot of interest from people who don’t want to queue up. They all do extremely well.”
Conversation