• Group turnover (including VAT), up 5.8% to £477 million (2000: £451 million)
  • Operating profit less interest up 15.7% to £16.1 million (2000: £13.9 million)
  • Earnings per share up 17.9% to 7.9p (2000: 6.7p)
  • Total dividend increases by 18.2% to 2.6p (2000: 2.2p)
  • Earnings per share up 65% over 3 years
  • Agreement to outsource distribution function

Commenting today, Martin Hyson, Chief Executive, said:

‘We are pleased to report this performance which has resulted in our sixth successive year of profit growth and confirms that our strategy of developing fresh food neighbourhood supermarkets is successful.

During this year we have taken a number of initiatives, the acceleration of a store opening programme, the introduction of Budgens Local, the outsourcing of our Distribution function and the closure of Budgens Direct. All of these initiatives are designed to focus the management team on the core business.

Trading in the year has started well with 6.6% growth in like-for-like sales for the first eight weeks. Budgens is ideally placed to take advantage of customers’ requirement for a good quality food retailer in their local neighbourhood and I am confident that the current year will be one of solid growth.’


Martin Hyson Chief Executive 020 7404 5959 on 5th July
Christian Williams Deputy Executive Chairman 020 8422 9511 thereafter
Andrew Fenwick
Catriona Booth
Brunswick 020 7404 5959

Audited Results for the 52 weeks
ended 29 April 2001


The strategy of continuing to develop local convenience stores supplying a large range of quality fresh food, together with a sound and competitive grocery offer, has enabled Budgens to produce our sixth year of growth and record profits.  Our decision to concentrate on the convenience sector and our heavy emphasis on customer care and fresh foods continues to reap rewards.

The attributable profit of £13.4 million is an increase of £2.0 million or 17.9% over last year (2000: £11.4 million).  Turnover, including VAT, advanced to £477m, an increase of 5.8%.  Retail operating profit, after interest, increased to £16.1 million (2000: £13.9 million) an improvement of 15.7%.

Pre-tax profit of £17.2 million increased by £2.6 million or 17.8% (2000: £14.6 million).  Basic earnings per share grew by 17.9% to 7.9p compared to last year’s figure of 6.7p and have now increased, cumulatively, by 65% in a three year period.  EBITDA increased to £29.9 million and this is 11.0% above last year at £26.9 million.


On the basis of these results, your directors are recommending a final dividend of 1.9p (2000: 1.6p) payable on 5 October 2001 to holders of ordinary shares registered at the close of business on 14 September 2001.  This makes a total payment of 2.6p per share, an increase of 18.2%, which is covered three times by attributable profits.


This year has seen eleven further store openings.  All these stores are performing in line with expectations and continue to support our policy of developing local neighbourhood stores which are the alternative shopping experience to the major supermarket groups.

There is considerable opportunity for Budgens to develop new stores.  These opportunities are located in small towns, large villages and inner city areas. We have strengthened our site acquisition team to enable us to accelerate our rate of store openings.

The successful refit programme has continued with a further ten stores converted.  A further seven stores will be re-fitted in the current year.

We have continued to review our b2 operation and further changes have been made to the range of products and layout.  A programme of fascia change to Budgens Express is now underway and will be completed in all suitable stores by the end of this current year.


These strong results of the Group demonstrate the success of our concept. The demand for good, local, shopping facilities has never been greater and Budgens is ideally placed to maximise this opportunity.

Notwithstanding the poor summer weather during 2000, the Group increased its turnover by 5.8% which includes the closure and disposal of one store at Botley in Oxfordshire.  Our concentration on providing quality fresh foods and a competitive promotional programme has achieved full-year like-for-like sales of 3.2%.

These like-for-like sales have been achieved in the face of substantial promotional activity by the major supermarket groups and this performance gives us great confidence for the future.

Our policy of supporting local British producers will continue and we are constantly reviewing our customer offer.  New merchandising standards have been introduced and great care is taken in product selection.

The development of our own-label fresh foods continues with an additional 280 lines introduced and this progress will continue into the current year.  The re-allocation of chilled space in existing and new stores has resulted in stores achieving up to 40% of sales in fresh foods.  The sales of Home Meal Replacement products continue to grow and, as an important part of the neighbourhood concept, will be further developed during the year.

Our range of fresh foods and a strong branded grocery range enables Budgens to be unique in the quality of offer for local neighbourhood shopping.


This division continues to develop successfully.  Our relationships with Q8 and Total are producing considerable sales increases from the 29 sites. There is good opportunity for future growth and Budgens remains dedicated to developing fresh food convenience stores on petrol forecourts.

The trial with Conoco indicated that Budgens was unlikely to receive an acceptable return from operating the twelve sites and it was mutually agreed to cease the arrangement.


Budgens Local was launched in July 2000 and is performing above both our expectations and those of the independent retailers who have joined the scheme.  The concept of an independent retailer adopting the Budgens’ fresh formula is proving successful with 24 stores currently operating through four independent retailers.

The daily delivery of fresh foods, the marketing support, store layout and range offer has proved to be highly attractive to the Budgens Local customers. We believe we will achieve our target of fifty stores by July 2002.


Our depot at Wellingborough continues to be central to the Budgens’ story.  It is this facility that creates the principal point of difference between Budgens and our competition. The ability to deliver all product groups and, in particular, fresh and chilled foods daily to our stores is a main factor in our success.

We have seen two developments at our Wellingborough depot.

Firstly, during the year, we agreed contractual terms with Gist (BOC Distribution Services) to manage our distribution fleet and, following the success of this project, we agreed terms with them on 1 July for the management of the warehouse function. The out-sourcing of this activity will allow the Group to give additional focus to developing the core business.

Secondly, we have acquired three acres of freehold land to allow us to build an additional facility to accommodate further expansion. However, the current depot still has considerable spare capacity.


Capital expenditure of £24.3 million was a decrease of £5.7 million over the prior year.  The expenditure was financed out of operating cash flow and bank facilities supported by lease finance of £11.7 million which, in turn, strengthened the balance sheet position.

Gearing at the year-end was 32.1% with borrowing largely represented by the convertible loan stock of £29.2 million. The Group has the opportunity to use substantial, unsecured, unutilised banking facilities to provide the necessary funds for either organic or acquisitive growth.


Last year saw a number of changes and I am pleased to report that the team has worked well and extremely hard to deliver these results.  Martin Hyson has proved to be a dynamic and enthusiastic leader; his retail knowledge and his experience is first class and he leads a powerful and cohesive team.

I am also pleased to report that Seamus Scally (Group Managing Director – Musgrave Group Limited) and Eoin McGettigan  (Executive Chairman – Super- alu Centra Division) joined the Board as Non-Executive Directors on 29 August 2000.  We have formed a good relationship and received considerable support from these two new Musgrave colleagues.


Individuals count within Budgens and a large factor in our success is the development of our team members.  This is clearly highlighted by the newly- appointed Executive Board Members, all of whom have been part of a successful succession policy.  The openness and friendliness of the organisation encourages people development and creates the successful retail operations where customers come first.

The results for the year demonstrate that dedication and commitment and I thank them all for their consistent efforts and congratulate them on achieving another outstanding performance.


Food retailing in the UK continues to be competitive.  Budgens’ policy of developing first-class local shopping facilities with heavy emphasis on fresh food enables the business, not only to prosper, but also to take a leading role within the UK convenience shopping market.

The current year has already produced two new stores at Waddington in Lincolnshire and Clerkenwell in London and we continue to make every effort to grow the retail estate.  Budgens Local will re-badge nine stores from the remaining Anglian Convenience Stores and agreement has been reached to develop a further six stores with Q8.

The current year has continued to be buoyant and sales for the first eight weeks are 10.8% ahead of the same period last year and profit margins and earnings are in line with our projections.  Assisted by favourable weather, like-for-like sales are 6.6% ahead which bodes well for the year as a whole.

Clive Clague
5 July 2001

In August, copies of the Annual Report and Accounts will be sent to shareholders and will also be available from Stonefield Way, Ruislip, Middlesex, HA4 0JR, the registered office of the Group.

                              BUDGENS PLC

Notes 52 Weeks Ended 52 Weeks Ended
29 April 30 April 2000
£ 000 £ 000
Group turnover including VAT
Continuing operations 476,076 451,145
Acquisitions 1,354 –
————— —————

477,430 451,145
Value Added Tax (32,105) (30,373)
————— —————

Group turnover excluding VAT

Continuing operations 444,023 420,772
Acquisitions 1,302 –
————— —————
445,325 420,772

Cost of sales (386,598) (368,583)
————— —————
Gross Profit 58,727 52,189

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Distribution costs (25,714) (23,439)
Administrative expenses (14,173) (12,611)
————— —————

Operative Profit/(Loss)
Continuing operations 18,866 16,139
Acquisitions (26) –
————— —————

18,840 16,139
Net profit on disposal of fixed
asset 1,080 665
Net interest payable (2,759) (2,242)
————— —————
Profit on ordinary activities
before taxation 17,161 14,562

Tax charge on ordinary
activities 1 (3,775) (3,204)
————— —————
Profit attributable to
shareholders for the financial
period 13,386 11,358
Dividends paid 2 (1,200) (3,749)
Dividends proposed 2 (3,246) –
————— —————
Retained profit for the period 8,940 7,609
=============== ===============

Earnings per share
Basic 3 7.9 p 6.7 p
Diluted 3 6.4 p 5.5 p

Dividend per share 2 2.6 p 2.2 p
Operating profit (% sales) 4.2% 3.8%

The notes on pages 8 to 10 form
part of these accounts.

AS AT 29 APRIL 2001

Group Company
Notes 2001 2000 2001 2000
£ 000 £000 £ 000 £000
Fixed assets
Goodwill 3,080 1,237 – –
Tangible assets 150,831 146,295 – –
Investments 935 351 36,872 36,872
——– ——– ——– ——–
154,846 147,883 36,872 36,872
——– ——– ——– ——–
Current assets
Assets held for resale – 527 – –
Stock 29,329 31,406 – –
Amounts falling due after
more than one year 113 – – –
Amounts falling due within
one year 24,289 20,544 61,267 55,202
Cash at bank and in hand 11,999 10,483 49,843 39,879
——– ——– ——– ——–
65,730 62,960 111,110 95,081
Creditors: amounts falling
due within one year (82,964) (83,475) (55,079) (54,458)

Net current
(liabilities)/assets (17,234) (20,515) 56,031 40,623
——– ——– ——– ——–

Total assets less current
liabilities 137,612 127,368 92,903 77,495

Creditors: amounts falling
due after more than one
Finance leases and hire (3,367) (1,950) – –
purchase contracts
Other creditors (307) (336) – –
Convertible bonds (29,249) (29,279) (29,249) (29,279)
——– ——– ——– ——–
(32,923) (31,565) (29,249) (29,279)
Provisions for liabilities
and charges (8,694) (8,906) – –
——– ——– ——– ——–
95,995 86,897 63,654 48,216
======== ======== ======== ========

Capital and reserves

Called up share capital 17,084 17,049 17,084 17,049
Share premium account 27,938 27,815 27,938 27,815
Profit and loss account 50,973 42,033 18,632 3,352
——– ——– ——– ——–

——– ——– ——– ——–
Total Shareholders Funds 4 95,995 86,897 63,654 48,216
======== ======== ======== ========

The notes on pages 8 to 10 form part of these accounts


52 Weeks Ended 52 Weeks Ended
29 April 2001 30 April 2000
Notes £ 000 £ 000
Operating profit 18,840 16,139

Depreciation charges 9,843 10,020
Amortisation of goodwill 100 68
Loss on sale of other tangible
fixed assets 762 424
Net movement in provisions (1,041) (728)
Decrease/(Increase) in stocks 2,241 (669)
Increase in debtors (3,855) (5,667)
Decrease in creditors (4,669) (5,676)
————— —————
Net cash inflow from operating
activities 22,221 13,911

Returns on investments and servicing of finance
Interest paid (2,384) (2,179)
Interest element of finance lease rental
payments (233) (299)
————— —————

Cash outflow for returns on
investments and servicing of
finance (2,617) (2,478)
————— —————
UK Corporation tax paid (973) (1,900)
————— —————

Capital expenditure
Payments to acquire assets for
resale – (527)
Payments to acquire tangible
fixed assets (23,914) (28,509)
Receipts from the sales of tangible
fixed assets 10,808 19,220
————— —————
Net cash outflow from capital
expenditure (13,106) (9,816)
————— —————

Purchase of 50% share in joint
venture (576) –
Purchase of subsidiary
undertaking (1,153) (238)
Net overdraft acquired with subsidiary
undertaking (53) –
————— —————

Net cash outflow from
acquisitions (1,782) (238)
————— —————

————— —————
Equity dividends paid (3,928) (3,314)
————— —————

————— —————
Net cash outflow before financing (185) (3,835)
————— —————

Issue of ordinary share capital 95 145
Receipts from new finance leases 3,043 –
Short term bank loan – 7,500
Repayment of loan notes – (100)
Capital element of finance lease
repayments (1,437) (2,105)
————— —————
Net cash inflow from financing 1,701 5,440
————— —————
Increase in cash in the period 5 1,516 1,605
=============== ===============

Receipts from the sale of tangible fixed assets in 2001 include an inflow
of £3,950,000 (2000: £15,098,000) that relates to the £1,080,000
exceptional profit (2000: £665,000) on the disposal of fixed assets.
During the year £63,000 of 5% convertible bonds were converted into
ordinary share capital.
Part of the consideration for the purchase of LC Seward & Sons Limited
comprised of unsecured loan notes.
The notes on pages 8 to 10 form part of these accounts.


Note 1: Tax Charge on Ordinary Activities
2001 2000
£ 000 £ 000

Corporation Tax
Current tax on income for the period 2,946 1,359

2,946 1,359
Deferred Tax
Deferred taxation charge for the period 829 1,845
3,775 3,204

The tax charge for the period is low as a result of the profit on sale of
fixed assets that has been sheltered by a combination of capital losses
and roll-over relief and the current period movement in deferred tax
which has not been provided for. If provision were made in full for
deferred tax an additional charge of £1,828,000
(2000: £336,000) would result.

Note 2: Equity Dividends Paid and Proposed
2001 2000
£ 000 £ 000

Interim – paid 9 April 2001 0.7p per share
(2000: 0.6p per share) 1,200 1,021
Final – proposed 1.9p per share
(2000: 1.6p per share) 3,246 2,728

4,446 3,749

Note 3: Earnings per Share
The basic earnings per share and diluted earnings per share calculations
have been prepared in accordance with Financial Reporting Standard 14
‘Earnings per Share’. The basic earnings per share calculations have been
based on the profit on ordinary activities after taxation of £13,386,000
(2000: £11,358,000) divided by the weighted average number of shares in
issue of 169,928,961 (2000: 169,415,415).

The diluted earnings per share is based on earnings of £14,412,000 (2000:
£12,386,000), being profit for the year of £13,386,000 (2000:
£11,358,000) adjusted by the interest expense relating to the liability
component of the convertible bond of £1,026,000 (2000: £1,028,000), and
on 224,651,578 (2000: 224,541,375) ordinary shares, calculated as

2001 2000
000 000

Basic weighted average number of shares 169,929 169,415
Dilutive potential ordinary shares:
Employee share options 1,405 1,694
Convertible loan stock 53,317 53,432
224,651 224,541

Note 4: Reconciliation of Movements in Equity
Shareholders’ Funds

2001 2000
£ 000 £ 000

Profit attributable to shareholders for the
financial period 13,386 11,358
Dividends (4,446) (3,749)

8,940 7,609

New share capital subscribed 158 304

9,098 7,913

Opening shareholders’ funds 86,897 78,984

Closing shareholders’ funds 95,995 86,897

Note 5: Reconciliation of Net Cash Inflow to
Movement in Net Debt

2001 2000
£ 000 £ 000

Increase in cash 1,516 1,605
Net cash inflow from an increase in net debt and
lease financing (1,606) (5,295)
Increase in net debt resulting from cash flows (90) (3,690)
Issue of loan notes on acquisition of L C Seward
& Sons Limited (1,121) –
Conversion of unsecured convertible loan stock 63 159
Amortisation of issue costs (33) (31)
Increase in net debt (1,181) (3,562)
Opening net debt (29,648) (26,086)
Closing net debt (30,829) (29,648)


Note 6: Analysis of Net Debt

non-cash 29 April
1 May 2000 Cash flows Movements 2001
£ 000 £ 000 £ 000 £ 000
Cash at bank and in hand 10,483 1,516 – 11,999
Bank loans (7,500) – – (7,500)
Loan notes due within one
year (100) – (1,121) (1,221)
Debt due after one year (29,279) – 30 (29,249)
Finance leases and hire
purchase contracts (3,252) (1,606) – (4,858)
Total (29,648) (90) (1,091) (30,829)

Note 7: Full Accounts

The above financial information does not constitute statutory accounts as
defined in Section 240 of the Companies Act 1985. The comparative
financial information is based on the Group’s statutory accounts for the
52 weeks ending 30 April 2000. Those accounts, upon which the auditors
issued an unqualified opinion, have been delivered to the Registrar of
Companies. The results contained in this preliminary announcement are
extracted from the Group’s statutory accounts for the 52 weeks ending 29
April 2001 which carry an unqualified auditor’s opinion. These accounts
will be delivered to the Registrar.