Tuesday, 8 April 2014

Booker Group - New Portfolio Purchase

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

Booker Direct is the Group’s delivered wholesale business which serves national accounts UK-wide. It has already established itself as the UK's largest food supplier to the cinema sector with customers including VUE and Odeon. Other accounts include HM Prisons in England & Wales (in partnership with DHL), Marks & Spencer and the NAAFI, as well as the more recent additions of SSP, HMV, and WH Smith Travel Ltd.

In 2009, the Company expanded its operation to India and now has over 12,000 customers

Booker have recently issued an interim management statement for the past quarter to March 2014 and also including figures for the full year.

Total sales in the 52 weeks to 28 March 2014, including Makro, were £4.7bn, up by 17.3% compared to last year.

Booker like-for-like total sales (excluding Makro) in the 52 weeks to 28 March 2014 were up by 2.1%. Like-for-like non-tobacco sales rose by 4.4%, while like-for-like tobacco sales fell by 1.7%.  Customer numbers, excluding Makro, increased by 5% to 529,000 and customer satisfaction improved.  Internet sales increased by 10% to £777m.

The Group had around £150m net cash at the end of the year, compared to £77m a year ago.  Profits for the 52 weeks to 28 March 2014 remain in line with expectations. I am hoping there will be an announcement at the time of the final results regarding a promise to return some of this excess cash to shareholders by way of a special dividend.

Charles Wilson, Booker Chief Executive, said:

"This was a good quarter with non tobacco like-for-likes up 3.4%.  Our plans for bringing Booker and Makro together are on track.  In this last quarter we achieved our best ever customer satisfaction scores in Booker and Makro as we continue to improve the choice, prices and service to catering, retailing and small business customers in the UK."

The Company has been on my watch list for just 12 months, when the price was around the 120p mark. The share price has fallen back from a high point of 175p in March and I have today taken the opportunity to purchase my usual ‘half’ @ 147p. I have pencilled in a figure of 3.5p per share dividend (excluding any special) for the coming year which puts the forward yield at 2.4%.

More following the full year announcement.

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