Booker protects bottom line

The group also finished the six-month period with £118m in the bank. It shelled out £62m for the 2015 special dividend of 3.5p, but only handed over £40m for its acquisition of Musgrave Retail Partners, owner of budget grocery chains Londis and Budgens, after the period-end in September. In the short term, Booker's bosses said integrating Londis and Budgens into the group will act as a drag on operating profit, but together the businesses should add roughly £5m to the bottom line in FY2017. Management also intends to pay another special dividend of about 3.5p to shareholders in July 2016, although no announcement will be made before the annual results next May.

For now, Booker is keeping busy with its 'focus, drive and broaden' plan. It hopes to drive sales growth by improving choice, price and service for customers, as well as expanding further into the catering market. The 'broaden' part of the plan covers the move into retail as well as Booker's online expansion - web-based sales rose 11 per cent to £461m. The group's new Indian business also fits into the 'broaden' strategy. Finally, the 'focus' initiative aims to maintain cash discipline and improve operational efficiency wherever possible.

Having updated their numbers in light of the Musgrave deal, analysts at Investec expect pre-tax profit of £152m for the current financial year, giving EPS of 7p, compared with £139m and 6.6p in the year ended March 2015. They have also raised their profit forecasts for the 2017 financial year from £164m to £171m, assuming a turnaround at Musgrave.