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Steady Booker delivers the goods

The cash and carry operator has delivered a solid result, which is all the more impressive in light of problems in the wider food retail sector.
October 17, 2014

Booker Group (BOK) might not be the most exciting business on the stock market, but it's certainly steady. That much is clear from its rock-solid trading in the first six months of the year, which is all the more impressive in light of the problems plaguing the wider food retail sector.

IC TIP: Buy at 121p

Like-for-like sales grew 2.4 per cent, driving adjusted operating profit up 15 per cent to £68.1m. Sales to caterers rose 2.7 per cent to £686m, while sales to retailers increased 2.6 per cent to £1.26bn. Internet sales were 12 per cent higher at £413m, and highly regarded chief executive Charles Wilson said delivery capacity would increase by 80 per cent over the next two years. He also plans to increase the number of Family Shopper discount stores from 15 to 300 over the next four years.

The integration of the Makro acquisition is firmly on track. Following a special dividend payment of 3.5p a share in July, Booker plans to pay out a similar amount to shareholders in July next year. Mr Wilson said current trading was ahead of last year, but still gave a cautious outlook in light of the well-documented price squeeze in food retail.

Peel Hunt expects EPS of 6.3p for the full financial year, up from 5.7p in 2014.

BOOKER GROUP (BOK)
ORD PRICE:121pMARKET VALUE:£2.1bn
TOUCH:120-121p12-MONTH HIGH:173pLOW: 115p
DIVIDEND YIELD:2.7%PE RATIO:20
NET ASSET VALUE:31p*NET CASH:£107m

Half-year to 12 SepTurnover (£bn)Pre-tax profit (£m)Earnings per share (p)Dividend per share (p)
20132.265.13.10.45
20142.367.43.20.52
% change+2+4+2+16

Ex-div: 30 Oct

Payment: 28 Nov

*Includes intangible assets of £440m, or 25p a share