AB. Alliance Boots

RNS Number:3395P
Alliance Boots plc
11 January 2007

11 January 2007

                       ALLIANCE BOOTS: Q3 trading update
                    Group remains on track for the full year

Alliance Boots plc, the international pharmacy-led health and beauty group,
today updates on trading for its third quarter (the three months ended 31
December 2006).

Revenue growth over the comparable period last year      Total   Like for like

Retail Division
UK                                                       +2.5%           +1.5%
International                                            +5.3%           +2.7%
Total                                                    +2.7%           +1.6%

Wholesale Division
Northern Europe                                         +14.3%           +2.9%
Southern Europe                                          -0.1%           +0.8%
Total                                                    +5.1%           +1.6%

All comments and comparative figures in this announcement are made on the basis
of pro forma figures for the comparative period as if the two former groups had
always been combined.  Like for like revenue growth is on a constant currency
basis.

Commenting today, Alliance Boots Chief Executive Richard Baker said:

"The Group performed well during the quarter and remains on track. Total and
like for like revenue grew in both divisions which, combined with our good
margin management, reinforces our confidence for the full year."

Retail

In the UK we performed strongly in both revenue and trading margin, in what has
been a highly competitive market.

Like for like revenue in the UK grew by 1.5%. The calendar quarter contained one
fewer Saturday and one additional Sunday compared to the prior year. This change
in days reduced like for like revenue by 0.7%, the impact of which will reverse
in the fourth quarter. The expected adjustments to the reimbursement rate in
relation to generic prescription medicines in the UK, which came into effect at
the beginning of October 2006, reduced underlying revenue growth by
approximately 1.2% over the comparative period last year. This impact is
entirely attributable to our dispensing activities.

Our Health & Beauty business delivered another record third quarter revenue
increase, supported by the "Gorgeous" advertising campaign. Trading margin
increased due to better buying, less discounting and promotional activity, and a
higher proportion of exclusive and own brand seasonal products.

In the Health category in the UK we saw continued growth in dispensing volumes,
growth in the value of these sales being lower, as anticipated, as a result of
the adjustments to the generics reimbursement rate.

In the Beauty & Toiletries category, where we have leading market positions and
brands, cosmetics and fragrances performed particularly strongly. This was a key
contributor to our biggest ever trading week in the run-up to Christmas for UK
Retail.

In the Lifestyle category (which includes seasonal and electrical beauty
products), good seasonal gift sales combined with more selective buying, tight
stock control and a good start to the post-Christmas sale, has resulted in us
entering the new calendar year with seasonal inventories in line with our
expectations.

Our international retail businesses traded in line with our expectations during
the quarter.

Wholesale

Revenue in our Wholesale Division grew, in what remain competitive markets.
Government price cuts and the trend towards the increased use of generic
medicines reduced total market value growth, but had no impact on volumes.

In Northern Europe our businesses performed in line with our expectations.
Revenue growth benefited from the acquisitions of Cordia Healthcare in the UK
and Apteka in Russia, and increased intra-group sales to our Health & Beauty
business.

In Southern Europe our businesses have similarly performed in line with our
expectations. In France the anticipated government action to contain healthcare
expenditure has now been confirmed which will result in an additional Euro35
million healthcare tax for 2006 allocated between all pharmaceutical wholesalers
and distributors. During the quarter the restructuring of our French warehouse
network has continued in line with plan.

Corporate development

The programme to comply with the undertaking given to the Office of Fair Trading
at the time they approved the merger is well underway. Of the 96 pharmacies in
the UK identified for disposal, conditional contracts have been signed to sell
89.

                                    - Ends -

Richard Baker, Chief Executive, and George Fairweather, Group Finance Director,
will host a conference call for analysts at 08.00 GMT.

UK dial in number   020 8515 2301
International dial in number   +44 20 8515 2301

Quote conference title - Alliance Boots Q3 Trading Update

A replay facility will be available for seven days:

UK dial in number   020 7190 5901
International dial in number   +44 20 7190 5901
Access number   134786#

For further information, please contact:

Investor Relations                                  Media
Gerald Gradwell/Chris Laud                          Donal McCabe
Tel: +44 (0)20 7138 1118                            Tel: +44 (0)20 7138 1164


                      This information is provided by RNS
            The company news service from the London Stock Exchange
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