Interim figures from generic consumables wholesaler Booker were in line with expectations following an earlier trading statement, but still underlined the very impressive progress chief executive Charles Wilson has made since taking the helm in late 2005. The key aim of reducing net debt, which stood at £361m four years ago, is now practically complete as strong operational cashflow plus further working capital improvement saw net borrowings reduced from £24.9m in March to £4m at the period end.
Booker's operational performance improved on practically any metric. On a like-for-like basis non-tobacco sales rose by 9.4 per cent and tobacco sales were up 5.1 per cent. In terms of customer split, underlying sales to caterers and retailers increased by 12.6 per cent and 5.5 per cent, respectively, which helped drive a 13.1 per cent rise in operating profits to £34.5m. Clearly the wider UK retail market is not booming to the same extent and the group seems to be winning business from smaller wholesaling/value retailing rivals more stretched by the credit crunch. In this trading environment, Booker's mantra of 'choice up, prices down' and the scale of its operation in terms of sales volumes are proving a key advantage.
Evolution Securities anticipates full-year EPS of 3p, rising to 3.2p for the 12 months to March 2011 (2009: 2.63p).
| BOOKER (BOK) | ||||
|---|---|---|---|---|
| ORD PRICE: | 43.5p | MARKET VALUE: | £649m | |
| TOUCH: | 43.5-43.75p | 12-MONTH HIGH: | 45.5p | LOW: 14.5p |
| DIVIDEND YIELD: | 2.1% | PE RATIO: | 15 | |
| NET ASSET VALUE: | 17p* | NET DEBT: | 2% | |
| 24 weeks to 11 Sep | Turnover (£bn) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2008 | 1.50 | 26.5 | 1.48 | 0.20 |
| 2009 | 1.61 | 29.7 | 1.66 | 0.24 |
| % change | +7 | +12 | +12 | - |
Ex-div: 28 Oct Paid: 27 Nov *Includes intangibles of £424m, or 28p per share | ||||
