The directors present the strategic report for the period ended 30 October 2024.

Business Overview

Acquisitions & Market Opportunity

MSLNA Healthcare was established to capitalise on the unique market opportunity to:
• Acquire 10 pharmacies from the Lloyds Pharmacy national divestment programme across Fife and Lothian

It was thought that these Acquisitions would enhance/strengthen the brands’ presence across Central Scotland providing:
• Defensive growth – protect and consolidate market share across existing regions.
• Strategic expansion – enter new catchment areas where competitors had previously dominated
• Scaled efficiencies – maximise the impact of the decision to centralise operations and support teams

Through these acquisitions, the overall Group has strengthened and established itself as one of the few credible consolidators in Scottish community pharmacy, creating a competitive footprint for the future.

Workforce Strategy & Integration Planning

As part of the acquisition programme, it was recognised that the pharmacies were significantly understaffed and reliant on locum cover. In fact, more than 90% of these sites were operated almost exclusively by locum pharmacists, creating challenges for service delivery and patient continuity.

To mitigate this, a comprehensive recruitment and training programme in the nine months leading up to completion of the acquisitions was initiated, involving:
• Recruitment of pharmacists, technicians and support staff to establish a stable, permanent workforce.
• Structuring training and development, ensuring new colleagues were aligned to Dears Pharmacy’s patient-first culture and clinical governance standards
• Operational planning, so that trained teams were ready to be deployed and fully integrated on day one of takeover

This proactive approach ensured that the acquired pharmacies were not only stabilised quickly but also positioned for immediate improvement in patient care and service consistency. It is important to note that the costs of this recruitment and training programme were incurred by the original Group prior to acquisition. While this had a short-term impact on reported financial performance, it provided long-term value by ensuring a seamless integration and the establishment of a sustainable workforce from the outset.

Centralised Operations and Investment

To support rapid growth and efficiency, dedicated centralised facilities have been established housing three core functions:
• Pick 2 Prescription Hub & Spoke Dispensing – designed to process up to 70% of dispensing volume centrally
• PillPouch Automated Solution – robotic pouch preparation with automated accuracy checking, replacing traditional monitored dosage systems
• Central Warehouse – consolidating procurement which enables redistribution across the network to strengthen resilience and purchasing power

These facilities were supported by new team recruitment, robust processes, and significant initial stock investment.

Enhanced Business Management Team

To complement operational infrastructure, the leadership and support functions have been strengthened, to provide stability and control in key areas supporting expansion:
• Head of Finance – robust financial management, forecasting, and funding strategy
• Field Operations – ensuring consistent branch performance and operational delivery
• Retail Development – modernise front-of-shop layouts and drive commercial growth
• Head of Commercial Purchasing – optimising supplier relationships and procurement efficiency

Diversification of Services

Predominantly, there has been a shift towards service diversification to reduce reliance on NHS income and meet modern patient expectations. Services launched include:
• Travel health clinics
• Children’s vaccination services
• Private blood testing and diagnostics
• Private prescribing and pharmacy services
• Ear health clinics

Furthermore, NHS services have been strengthened by supporting pharmacists training as Independent Prescribers and developing new roles for technicians and accuracy checkers, enabling Pharmacy First Plus delivery.

Technology and Sustainability

Committed to building a technology-enhanced sustainable model, Investment has been directed towards development of the following:
• Bespoke Patient App – supporting prescription management, health advice, and patient communication
• New Website & Online Booking – full digital booking for both NHS and private services
• 24/7 Automated Collection Points – providing secure and convenient access for patients
• Green Fleet Transition – introduction of electric mopeds, with a target of a fully green delivery fleet by end of 2025

Retail Development

In partnership alongside a leading pharmacy wholesaler, the retail proposition has been enhanced to:
• Promote health, wellbeing, and self-care purchases
• Modernise layouts for improved patient journeys
• Strengthen commercial performance with a more relevant front-of-shop proposition

Risk Management

The Group operates in a complex environment. Key risks and mitigations include:
• NHS Funding Risk – mitigated by diversification and financial reserves
• Supply Chain Risk – addressed by warehouse redistribution and bulk purchasing
• Regulatory Risk – managed through compliance monitoring and training
• Technology & Cyber Risk – secure systems and audits in place
• Workforce Shortages – mitigated through career pathways and retention packages
• Reputation & Patient Trust – safeguarded through strong governance and transparent communication

Financial and Operational Performance

It has been widely established that the NHS changeover to a new computerised system has culminated in delays in the recovery of prescription income by Community Pharmacies. Whilst acknowledged, recognised and reported monthly by the NHS, an actual payment date for this shortfall has not been established and a contingent Asset has been included in respect of the amount that is expected to be recovered.

Significant upfront investment in infrastructure, services, and acquisitions has laid a strong foundation for growth, most notably
• Outperforming national market share growth, expanding at twice the Scottish average
• Developing Private services to provide revenues beyond NHS funding

• Centralised operating solutions to sustain and improve margin efficiency

The group is in the latter stages of discussions with a new lender in respect of the restructure of its borrowing requirements. This refinancing would see all current bank loans refinanced and consolidated with one lender, providing sufficient headroom to continue to support the company/group in its growth plans. The directors recognise the importance of securing these new facilities in respect of their impact on the going concern status of the group.

Key Performance Indicators (KPIs)

The Board monitors performance using a balanced set of KPIs:
• Turnover Growth – revenue vs budget and sector benchmarks
• Gross Profit Margin – procurement efficiency and pricing strategy
• Market Share Growth – expanding at 2x national average
• Prescription Volume – hub capacity to handle 70% of dispensing
• Private Service Revenues – growth across travel, diagnostics, and vaccinations
• Patient Access Metrics – digital bookings and 24/7 collection usage
• Sustainability Progress – % of deliveries using the green fleet
• Staff Development – enhancing the number of prescribers trained and qualified technicians

Strategic Outlook

The directors remain confident in the long-term strategy, with priorities including:
• Ongoing branch refits and relocations to improve patient experience
• Expansion of the private services portfolio
• Continued acquisition activity – two further pharmacies secured post year-end.
• Greater digital engagement through app and online booking
• Ongoing staff development and creation of clinical career pathways

On behalf of the board

The directors of the company have elected not to include a copy of the profit and loss account within the financial statements.true

For the financial period ended 30 October 2024 the company was entitled to exemption from audit under section 477 of the Companies Act 2006 relating to small companies.

The directors acknowledge their responsibilities for complying with the requirements of the Companies Act 2006 with respect to accounting records and the preparation of financial statements.

The members have not required the company to obtain an audit of its financial statements for the period in question in accordance with section 476.

These financial statements have been prepared and delivered in accordance with the provisions applicable to companies subject to the small companies regime.

MSLNA Healthcare Limited is a private company limited by shares incorporated in Scotland. The registered office is Norwood, 3 Beech Road, Lenzie, United Kingdom, G66 4HN.

These financial statements have been prepared in accordance with FRS 102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland” (“FRS 102”) and the requirements of the Companies Act 2006 as applicable to companies subject to the small companies regime. The disclosure requirements of section 1A of FRS 102 have been applied other than where additional disclosure is required to show a true and fair view.

The financial statements are prepared in sterling, which is the functional currency of the company. Monetary amounts in these financial statements are rounded to the nearest £.

The financial statements have been prepared under the historical cost convention, [modified to include the revaluation of freehold properties and to include investment properties and certain financial instruments at fair value]. The principal accounting policies adopted are set out below.

At the balance sheet date, the company had net liabilities of £520,823.The directors have confirmed that they will continue to provide financial support to the company until such time that the financial position improves. The directors therefore consider it appropriate to prepare the financial statements on a going concern basis.true

Tangible fixed assets are initially measured at cost and subsequently measured at cost or valuation, net of depreciation and any impairment losses.

Depreciation is recognised so as to write off the cost or valuation of assets less their residual values over their useful lives on the following bases:

Interests in subsidiaries are initially measured at cost and subsequently measured at cost less any accumulated impairment losses. The investments are assessed for impairment at each reporting date and any impairment losses or reversals of impairment losses are recognised immediately in profit or loss.

A subsidiary is an entity controlled by the company. Control is the power to govern the financial and operating policies of the entity so as to obtain benefits from its activities.

Cash and cash equivalents are basic financial assets and include cash in hand, deposits held at call with banks, other short-term liquid investments with original maturities of three months or less, and bank overdrafts. Bank overdrafts are shown within borrowings in current liabilities.

In the application of the company’s accounting policies, the directors are required to make judgements, estimates and assumptions about the carrying amount of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.

The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised where the revision affects only that period, or in the period of the revision and future periods where the revision affects both current and future periods.

The average monthly number of persons (including directors) employed by the company during the period was:

The following amounts were outstanding at the reporting end date: