Agreed business sales in pharmacy sector up 45 per cent in H1 2023

During the first half of 2023, agreed business sales in the UK pharmacy sector were up 45 per cent on the same period a year earlier, according to a new report. This has been aided by strong appetite among buyers, with forecasts that this will continue through the remainder of this year and into 2024.

Despite the sharp increase in agreed deals, Christie & Co’s 2023 Pharmacy Market Review – which tracks the sector over the 12 months to June 2023, completed sales during H1 2023 were on par with the same period in 2022.

This disparity in agreed deals was partly attributed to significant delays that the sector saw in processing applications for Fitness to Practice and Change of Ownership, according to Christie & Co’s Director – Head of Pharmacy Tony Evans.

Looking in more detail at the figures for the first half of the year shows that the spread of buyers has been considerably more even so far this year compared to 2022. In the full year 2022, sales to existing contractors in the sector outweighed sales to first-time buyers by around three-to-one. During the first half of this year, however, approximately a third of sales were to first-time buyers.

While there was considerable difference between the spread of buyers in the first half of 2023 compared to H1 2022, during the year to June 2023, buyer volumes were broadly consistent with the year prior – with around 80 per cent being first-time buyers and approximately 6,000 applicants across all buyer types.

The strong appetite among first-time buyers, Christie & Co says, reflects the fact “that many pharmacists continue to seek opportunities to invest in the market and operate their own businesses.”

During 2022, 55 per cent of sales completed by the company were share sales, while 57 per cent in the first half of 2023 were of corporate structures. However, the report adds that the split between share and asset sales may narrow once again as change of ownership applications go through during the remainder of the year.

2023 saw deal timelines increase from their 2022 levels. In 2022, the average sales timeline was 31 weeks, however, the year also saw the initiation of a significant number of corporate sales processes, the majority of which were asset sales.

As Christie & Co explain: “Due to the differing regulatory processes between asset and share sales, this created huge pressure on the regulatory change of ownership process with the limited resources of PCSE (Primary Care Support England) and NHSLATs already under significant stress.”

This resulted in timelines increasing again during the first half of 2023, with an average of 32 weeks from agreement to completion for all sale types. This was largely due to the longer transaction times required in asset sales (average timeline of 35 weeks in H1 2023) compared to share sales (29 weeks).

Looking forward, Tony Evans says that the announcement of England’s new £645 million in funding to support a “Pharmacy First”-style scheme will contribute to growing confidence in the sector. Evans adds that, while Community Pharmacy England remain in negotiation with the Department of Health and Social Care over the details of the funding, pharmacies should begin to see the benefit in the latter part of 2023.


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