How online pharmacy brand Pharmacy2U 'dramatically' improved profitability

Accounts for the Leeds-headquartered business recently filed at Companies House show it made £2.9m in pre-tax profit in the year to March 31, 2022, compared to £0.1m profit the year before.

Revenue increased by 18 per cent from £139.8m to £165m.

The company is the country’s largest dedicated NHS contracted online pharmacy delivering prescriptions direct to patients’ doors.

The coronavirus pandemic and subsequent national lockdowns that began in March 2020 led to unprecedented growth in demand for the company’s core services.

In their report accompanying the accounts, the directors said: "The company made significant improvements in operational efficiency and leveraged the increased scale to improve gross margin.

"In addition, improved awareness of the Pharmacy2U brand led to a lower marketing cost per patient.

"The combination of these factors dramatically improved profitability.”

The company said it continued to invest in multiple marketing channels to recruit new patients.

The number of NHS patients nominated to Pharmacy2U increased by nine per cent to 666,000 during the year, up from 611,000 the year before.

The directors’ report added: “A number of strategic partnerships have been agreed in the past year which, in combination with existing marketing expertise, will allow the company to recruit patients faster and more efficiently.”

During the pandemic, the company incurred additional costs exceeding £4m, due to extra staff breaks to allow frequent cleaning of all facilities, and overtime paid to staff.

Significant cost was also incurred to enable over 200 office-based employees to work from home.

The company received a one-off payment of £4.3m during the year as compensation for these costs.

Looking ahead, the company said it was “striving to gain a much higher share of the NHS repeat prescription market in England”

The group launched a second dispensing facility in Leicester at the end of 2021, which together with the Leeds facility will provide operational capacity for circa 10 per cent of the repeat prescription market in England, it said.