Friday, 23 May 2014

Booker Group - Final Results

Booker Group is the UK’s leading food wholesaler, offering branded and private-label goods which are sold to almost half a million customers including independent convenience stores, grocers, leisure outlets, pubs and restaurants. They employ around 10,000 people.

The shares were added to my portfolio last month (link). They have now announced final results for the full year to end March 2014 (link via Investegate). This merely confirms the numbers put out in April which looked pretty impressive to me.

Charles Wilson, CEO, said:
 "Our plan to Focus, Drive and Broaden the business remains on track.  Customer satisfaction continued to improve and we achieved our best satisfaction ever.   We grew the Group to £4.7bn of sales.  Most importantly we teamed up with Makro to become the UK's leading wholesaler to caterers, retailers and small businesses.  We strive to provide our customers with improved choice, prices and service via the internet, delivery and cash and carry.  We have a great team at Booker and Makro and together we will help our customers prosper in the year ahead."

They have announced an increase of 22% in the full year dividend to 3.2p (2.63p 2013) - the cover is 1.85x - and also propose an additional return of 3.5p per share at a cost of around £61m.  It is proposed that this is achieved by the issue of a new class of "B" shares which shareholders will be able to redeem for cash. They also indicated the return of capital to shareholders of a similar amount next year.

This therefore provides a total investment return of 6.7p equivalent to a yield of around 4.9% at the current share price of 137p. Of course, as some of this return will be capital, it is not strictly accurate to talk in terms of yield which relates to dividends.

The balance sheet looks solid with an increase in net cash to £149.6m (£77.2 2013). Free cash flow remains a steady 2.2x.

Midcap shares generally have seen a significant sell-off in recent weeks. I am fairly confident Booker will start to resume its upward share price trajectory in the near future - hopefully this will become one for the long term and I would certainly be very happy if the 22% uplift in dividend were to be repeated over the coming year!


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