Join our community of smart investors

Booker buys Londis and Budgens

As promised, there's another special dividend from food wholesaler Booker - not to mention another high-profile acquisition
May 22, 2015

Booker (BOK) is a company you can count on. Having returned £61m to shareholders last year, the food wholesaler has kept its word and will return more cash to investors this July. This time the special dividend is worth 3.5p a share, or £62m in total. The group has said it hopes to repeat the payout next year, too.

IC TIP: Buy at 170p

The group is, in effect, handing back money it took three years ago: in July 2012 Booker tapped investors for £124m to buy the lossmaking Makro chain from German food retail giant Metro. Last year's like-for-like sales growth of 3 per cent excludes Makro, but Booker said the acquired business had already made a good contribution and would help the company reach its target of £6bn in group sales in the next few years.

Booker now hopes to repeat something of its success with Makro by snapping up grocery chains Londis and Budgens through the £40m acquisition of Musgrave Retail Partners. The deal will be financed out of group cash and will expand Booker's footprint in the south-east of England.

Analysts at Investec expect pre-tax profits of £154m this financial year, giving EPS of 7.1p, up from £139m and 6.6p in FY2015.

BOOKER (BOK)
ORD PRICE:170pMARKET VALUE:£2.98bn
TOUCH:169.9-170p12-MONTH HIGH:173pLOW: 115p
DIVIDEND YIELD:2.2%PE RATIO:25
NET ASSET VALUE:34p*NET CASH:£147m

Year to 27 MarTurnover (£bn)Pre-tax profit (£m)Earnings per share (p)Dividend per share (p)
20113.60713.91.67
20123.93914.82.28
20133.99924.52.63
20144.681226.13.20
20154.751396.73.66
% change+1+14+11+14

Ex-div: 11 Jun

Payment: 10 Jul

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