British Health, Beauty Retailer Still Confident despite a Profit Slide

High Street stores group Boots, Britain's biggest health and beauty retailer, turned in a pedestrian performance over the first half, with profits falling by almost 3 percent despite good increases in sales over the second quarter.

The results were, however, at the top end of analysts' expectations and chief executive Steve Russell declared himself "encouraged" by the pre-exceptional profit of UKpound 279.6 million.

He said Boots' full-year performance will be in line with its expectations and that the first-half outcome had been hit by UKpound 40 million of investment in the core Boots the Chemist chain, together with a UKpound 14 million increase in pension costs.

New products boosted like-for-like sales at the chain by 5.7 percent over the second quarter but the group is still struggling to turn these into profits.

Group sales advanced by 4.4 percent to UKpound 2.4 billion in the six months to 30 September but the core retail chain saw profits fall by 6.1 percent to UKpound 256.4 million.

The Wellbeing Services side, which takes in Boots Opticians, dentistry and chiropody, made losses of UKpound 16.1 million.

Russell made no comment on current trading but said: "We have the right product ranges and promotional plans for the important Christmas trading period.

"I am confident that we will deliver a full-year performance in line with our expectations at the start of the year."

The interim dividend is raised by 3.7 percent to 8.4 pence.