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Rowlands Pharmacy lost £1.76m in the year to January 31, its latest accounts reveal, with the company attributing the dip to reduced sales and prescription items.

Its losses were 440 per cent greater than in 2025, when it posted a £326,000 loss.

The company said lower items volume and OTC sales were driving factors, as well as reduced margin rates, with interest costs also rising as a result of its acquiring outpatient dispensary (OPD) sites in hospitals.

However, “a full year’s benefit” of owning the OPD sites since acquiring them from  in 2024-25 also helped offset cost rises in other areas, said the company, adding that the new acquisitions helped turnover rise from £522m to £861m year-on-year.

Staff headcount rose from 2,966 to 3,377 “primarily due to the net effect of the additional OPD branches that novated over from LloydsPharmacy Healthcare Services Ltd”.

The number of staff employed at community pharmacy sites fell as Rowlands shed high street branches through a “strategic divestment” initiative, with the head office team also seeing cuts. While the report does not reveal how many community pharmacies were sold in 2025-26, it refers to two branches being sold after January 31.

Some existing branches are being refurbished to help improve the range of clinical services on offer and “encourage colleagues in pharmacies to spend more time interacting with customers,” said Rowlands.

The financial report added: “Gross margin has decreased primarily due to sales mix and sustained cost price pressures within the pharmacy market, which continue to impact product profitability.

“Additionally, recent cuts to Category M funding have further constrained margins, reflecting broader challenges in the reimbursement landscape and increasing pressure on operational efficiency.”

Rowlands said inflation is having a “significant impact” on its cost and profitability, adding that company management “are focused on cost control to mitigate the effect as much as possible”. 

The accounts state that the chain has “maintained its share” of the sector’s increased funding in the last two contractual settlements.

Company directors said the company has “remained stable” thanks partly to its German parent company the Phoenix group reducing intracompany debt by £370m the previous year through a capital restructure.