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Rowlands Pharmacy has managed to reduce its financial losses from £28m to £326,000 through revenue from newly acquired hospital sites and cost-cutting measures including the sale of numerous retail branches, its latest accounts reveal. 

The Phoenix-owned multiple’s Companies House filing for the year to January 31, 2025 details how the year-on-year 98.8 per cent reduction in post-tax losses is “principally due to increased item volume, OTC sales and divestment of branches”. 

In addition to the sale of high street pharmacies, the chain has also agreed contracts with “over 26 NHS trusts” and now operates “an additional 46 outpatient pharmacy department (OPD) dispensary sites,” which it says has helped in boosting turnover. 

As of October 2025, the company’s website lists a total of 332 branches, which includes all hospital-based pharmacies and represents an uplift of 16 from the figure of 316 that a spokesperson quoted to P3pharmacy in autumn 2024. Five years ago, the chain comprised 520 branches. 

“Nine retail pharmacies included in assets held for sale were disposed of” after January this year, the accounts add.

The financial report details that turnover rose by 27 per cent from £410m to £522m, adding: “In addition to improved trading performance, a reduction of the number of branches compared with the prior year has had an effect in reducing distribution costs." 

The company’s balance sheet has also benefited from a reduction in “intercompany debt of £370m” owed to its immediate parent company, wholesaler Phoenix Medical Supplies Ltd, which has seen its yearly profits rise from £50.8m to £85m.

Business challenges

The annual report describes how the company has faced the challenges of an inflationary environment, explaining that while it may see some income growth via the funding boost in the contractual settlement for pharmacies announced in March, “management are focused on cost control to mitigate the effect as much as possible”.

The number of employees on the payroll fell from 3,245 to 2,996 due to the “net effect” of acquiring OPD branches, selling high street branches and “structural changes to the operational team to support the core business operations”.

This has led to personnel costs falling slightly from £76.8m to £76.7m (a 0.16 per cent reduction). 

“Continued execution of the OTC and services strategy” has also contributed to “higher sales across both revenue streams,” said the company’s directors. 

Rowlands has invested in store refits, which it explained are “designed to improve accessibility to a range of healthcare services and products in the local communities and to encourage colleagues in pharmacies to spend more time interacting with customers”. 

Prescription turnover fell from £359m to £332m year-on-year, while OTC turnover held roughly steady at just over £24m despite the company’s high street estate shrinking. 

Meanwhile, NHS services turnover skyrocketed from £26.3m in 2023-24 to £165m in 2024-25. 

Despite the rise in overall profits, gross profit margins fell from 25.57 per cent to 22.43 per cent due to “sales mix and sustained cost price pressures within the pharmacy market which continue to impact profitability”.

Read more: ‘Looking beyond community pharmacy’: Rowlands acquires six hospital branches

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