Morrisons - comment
The in-store pharmacy business at Morrisons is worth about £170m, so a sale would be useful but not game-changing. The rationale behind owning pharmacies is to drive grocery revenue; therefore, the sale of the business rather than closure is likely to be the preferred option.
We estimate 110 pharmacies are still operating. Morrisons Pharmacies will not include the 20% OTC sales in a standalone pharmacy, as this will accrue to the general store. Annual revenue (£3.5m * 80%) => £2.8m per store or £308m. Assuming an EBITDA margin of 7% and a multiple of 8 times, the business is worth approximately £170 million.