Food wholesaler Booker (BOK) is to return £61m to shareholders, equating to 3.5p a share, following a year of strong cash generation that pushed up the underlying pre-tax profit by a quarter to £119m. Chief executive Charles Wilson told us a similar tranche of cash will be returned in July 2015, as a gesture of thanks to shareholders who supported Booker's £140m equity-funded acquisition of Makro in 2012.
The company reported a 2 per cent rise in like-for-like sales last financial year, with underlying revenue in the catering business up by 7 per cent. Here, Booker's focus on choice, low prices and excellent service is clearly paying off. While pricing pressure in food retail is apparent, deflation can paradoxically be helpful, says Mr Wilson. One of Booker's pub-owner customers is saving £20,000 a year thanks to cheaper chips, leaving him more to invest in his business - including buying more Booker products.
Meanwhile, sales in the Premier convenience stores grew 12 per cent, thanks partly to store openings. Most impressively, Makro served up an £11m profit - up from an £18m loss last year -despite a 9 per cent fall in sales as the newly acquired business exited unprofitable categories.
Broker Investec Securities expects pre-tax profit of £135m in fiscal 2015, giving EPS of 6.3p - up from £119m and 5.7p.
| BOOKER (BOK) | ||||
|---|---|---|---|---|
| ORD PRICE: | 139p | MARKET VALUE: | £2.4bn | |
| TOUCH: | 139-140p | 12-MONTH HIGH: | 178p | LOW: 116p |
| DIVIDEND YIELD: | 2.3% | PE RATIO: | 23 | |
| NET ASSET VALUE: | 34p* | NET CASH: | £150m | |
| Year to 28 Mar | Turnover (£bn) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2010 | 3.39 | 57 | 3.2 | 1.27 |
| 2011 | 3.60 | 71 | 3.9 | 1.67 |
| 2012 | 3.93 | 91 | 4.8 | 2.28 |
| 2013 | 3.99 | 92 | 4.5 | 2.63 |
| 2014 | 4.68 | 122 | 6.1 | 3.2 |
| % change | +17 | +32 | +35 | +22 |
Ex-div: 11 Jun Payment: 11 Jul *Includes intangible assets of £439m, or 25p a share | ||||
