A pharmacy group located in the North East is actively seeking a buyer in the wake of entering administration due to recent financial challenges. Steven Ross and Allan Kelly, joint administrators from FRP Advisory, are spearheading the search for a buyer for the Gateshead-based group, including the holding companies for its eight pharmacies across North-East and Yorkshire – Northcare Ltd and Medway Ltd.
In recent months, the group encountered financial difficulties that have adversely affected both its businesses’ cashflows and the group’s capacity to manage its debts, according to the administrators.
The most recent financial reports for Northcare and Medway, spanning the year up to May 2022, indicated that the combined bank liabilities of the two firms exceeded £3.8 million.
Despite the financial struggles the businesses have undergone, no employee reductions have occurred to date. All shops within the group will maintain regular operations under the administrators’ supervision during the buyer search.
“Pharmacies offer vital services to local communities, necessitating prompt action to commence administration and establish a protective framework that allows the eight sites across the group to continue their operations,” commented Steven Ross, Partner and Joint Administrator at FRP Advisory.
The administrators have launched a marketing campaign to discover potential buyers for the group’s shops, including Spinks the Chemist in Beverley and Gateshead, Norfolk Park Pharmacy in Sheffield, AD Phillips and Phillips Chemist in Trimdon, Wolsingham Pharmacy in Wolsingham, and Newham Pharmacy on the Hardwick Estate.
“We are committed to collaborating with suppliers, customers, and healthcare providers, including the NHS, to ensure uninterrupted service as we prepare for a sales process that secures the pharmacies’ enduring future. We also encourage interested parties to come forward and register their interest,” he added.
In July, two dozen parliamentarians urged the Prime Minister to take action due to the increasing wave of pharmacy closures in recent years. A letter signed by MPs and peers highlighted the risk of additional crises, pointing to the influence of growing business costs and consecutive years of funding cuts on pharmacy operations. Recent PSNC data shows that England has experienced the closure of over 639 local pharmacies since 2016, nearly averaging one closure per constituency.”
Meanwhile, the Company Chemists’ Association recently revealed that a significant portion of distance selling pharmacies are breaching their NHS contracts. As per their recent study, 72 per cent of DSPs dispense over half of their prescriptions to patients in a single postcode area within a 10-mile radius of the pharmacy. The absence of effective regulation for these ‘pseudo’ distance selling pharmacies contributes to the closure of local pharmacies.