Booker (BOK) is living up to its reputation as a business fixer-upper. Since the wholesaler bought struggling convenience chains Budgens and Londis last year, it has turned sales around. During the first week of trading under Booker, their sales fell 20 per cent but by the 24th week this had improved to 15 per cent growth. It has also managed to generate £28m in cash from the acquired businesses. As such it looks like Booker will make good on its promise to return surplus funds to shareholders next July, just as it did in the wake of the 2012 acquisition of German chain Makro. Since then, Booker has returned £180m via three special returns.
It also looks like the company will meet current year forecasts thanks to a strong first half. Like-for-like sales, excluding tobacco, rose 0.1 per cent. But a 10 per cent improvement in online sales helped push the top line higher on a statutory basis. Good cost control and slightly higher finance income protected the bottom line. So far, trading during the first four weeks of the second half is said to be ahead of last year.
Analysts at Peel Hunt expect pre-tax profit of £170m for the year ending March 2017, giving EPS of 7.9p, compared with £153m and 7.3p in FY2016.
| BOOKER (BOK) | ||||
|---|---|---|---|---|
| ORD PRICE: | 183.5p | MARKET VALUE: | £3.26bn | |
| TOUCH: | 183.4-183.5p | 12-MONTH HIGH: | 188p | LOW: 145p |
| DIVIDEND YIELD: | 2.2% | PE RATIO: | 24 | |
| NET ASSET VALUE: | 29p* | NET CASH: | £106m | |
| Half-year to 9 Sep | Turnover (£bn) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2015 | 2.2 | 74.1 | 3.5 | 0.57 |
| 2016 | 2.5 | 81.0 | 3.8 | 0.63 |
| % change | +13 | +9 | +11 | +11 |
Ex-div: 27 Oct Payment: 25 Nov *Includes intangible assets of £466m, or 26p a share | ||||
