UK: Booker H1 beats expectations
- Profit before tax up 13%
- Sales up 3.3%
- Margin improvements
The UK's largest cash and carry wholesaler Booker Group has posted a 13% rise in first-half profits, beating market expectations and prompting shares in the group to jump in morning trade today (18 October).
In its half-year earnings update, Booker said pre-tax profit climbed to GBP50.6m (US$81.7m), up from GBP45m last year. Revenue increased 3.3% to GBP1.9bn. Like-for-like sales, excluding tobacco, rose 3.8% in the six months. Margins at Booker rose to 2.7% versus 2.49% in the first half of last year.
Booker said the result excludes the Makro business, which it acquired in July from Germany's Metro. Booker said it anticipates the acquisition to weigh on its operating profit in the second half of the year by "nil to GBP10m".
"First-half profit before tax from Booker has beaten our expectations by 8%... after a stronger margin performance," Investec analyst Nicola Mallard wrote in a note to investors.
The beat prompted Mallard to raise Booker's full-year profit before tax by 3%.
Shares in Booker were up 4.33% at 11am BST, rising to 98.44 pence.
Booker Group plc Interim results for the 24 weeks ended 14 September 2012
This announcement contains the interim results of Booker Group plc ('Booker') for the 24 weeks ended 14 September 2012.
We acquired Makro Holding Limited and two subsidiaries; Makro Properties Limited and Makro Self Service Wholesalers Limited, ('Makro') on 4 July 2012. We have notified the transaction to the Office of Fair Trading ('OFT') and the competition review process is ongoing. Until this review is complete, we are required to hold the Makro business separate from the rest of Booker and the results of Makro are, therefore, not reflected in these results but are treated as an investment.
Financial Highlights (Makro not consolidated) · Total sales £1.9 bn, +3.3% · Like-for-like sales were +3.1%: - non-tobacco +3.8% - tobacco +1.8% • Like-for-like sales to caterers were +4.7% and to retailers +2.2% • Operating profit (pre £3m exceptional charge related to Makro acquisition costs) +12.4% to £51.6m (2011: £45.9m) • Profit before tax (post exceptional charge) +13.3% to £51.0m (2011: £45.0m) • Profit after tax (post exceptional charge) +13.0% to £40.8m (2011: £36.1m) • Basic earnings per share (post exceptional charge) +6.4% to 2.50p (2011: 2.35p) • Net cash £69.8m (2011: £58.7m), after spending £15.8m on the cash element of the Makro consideration • Interim dividend per share up 15.2% to 0.38 pence (2011: 0.33 pence) • Subject to obtaining competition clearance, we expect Makro to reduce Group operating profit in 2012/13 by £nil to £10m, and increase operating profit in 2013/14 by circa £10m
Operating Highlights · Customer satisfaction has improved which has driven like-for-like sales · Conversion of another 3 branches into the 'Extra' format, taking the total number of 'Extra' branches to 145 · Internet sales +10.7% to £332m (2011: £300m) · Booker Direct, Ritter Courivaud and Classic are performing well · Chef Direct is becoming the new force in foodservice · Following competition clearance, Booker and Makro will seek to become the UK's leading wholesaler to caterers, retailers and small companies · Our 3 branches in India are on track and we expect to open 2 more branches in the second half
Outlook Group turnover in the second half to date (excluding Makro) is ahead of the same period last year. Working capital levels and costs are in line with plan. Overall, Booker Group plc continues to trade in line with management expectations.
Commenting on the results, Charles Wilson, Chief Executive of Booker, said,
"Our plan to Focus, Drive and Broaden Booker Group is on track. We improved choice, price and service for our customers, which increased sales by 3.3%. Booker Direct, Ritter Courivaud and Classic are performing well and Chef Direct has got off to a great start and the increase in the interim dividend is evidence of the Board's confidence in the outlook for Booker. Subject to competition clearance Booker and Makro will be able to improve choice, prices and service for caterers, retailers and small businesses in the UK. Once integrated, Makro will prove a good addition to the Booker Group."
Original source: Booker Group
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