Non-tobacco sales underpin growth at Booker

Wholesaler Booker Group posted its final results for the 52 weeks to 24 March on Thursday, with sales rising 6.7% to £5.3bn, consisting of 8.7% growth in non-tobacco sales, and 2.4% growth in tobacco sales.

The FTSE 250 firm said like-for-like sales were up 0.5%, driven by non-tobacco sales growth of 2.8%, while tobacco sales fell 4.6%.

Like-for-like sales to caterers were up 4.4%, and to retailers were down 0.6%.

Booker said operating profit improved 14% to £176.1m, with profit before tax increasing 15% to £174.0m and profit after tax up 20% at £153.8m.

Basic earnings per share were up 1.42p to 8.66p, and the company had net cash of £160.7m at year-end, compared to £127.4m 12 months earlier.

The board declared a final ordinary dividend of 4.97p per share, taking the total ordinary dividend to 5.60p per share.

It also proposed a special dividend of 3.02p per share, taking the total return to shareholders to 8.62p per share - an 11% improvement year-on-year.

Booker also updated the market on its planned merger with Tesco, as announced on 27 January.

“This combination should improve choice, quality, prices and service for the UK consumer,” Booker’s board said on Thursday, adding: “it should also help the Booker catering, retail and small business customer prosper in a challenging market.”

The company said it was continuing to assist the UK competition authorities in their ongoing consideration of the merger and it was expected that the merger would complete in late 2017 or early 2018, subject to - among other things - the necessary shareholder approvals.

“During this process Booker will ensure it is ‘business as usual’.

“We are excited by the opportunities the merger creates for consumers, our customers, suppliers, colleagues and shareholders.”

Looking ahead, the board said the group's revenue in the first seven weeks of the current financial year was ahead of last year.

However, as a result of the proposed merger, Booker was now in an offer period and as such would not be making forward-looking statements for the duration of the offer period.

“Booker Group had another good year,” said chief executive Charles Wilson.

“Our plan to focus, drive and broaden the business remains on track.

“Customer satisfaction was strong and sales and profits were the best we have ever achieved.”

Wilson reiterated the company’s plans to merge with Tesco to create the UK's “leading” food business.

“This merger should deliver significant benefits for consumers, Booker customers, suppliers, colleagues and shareholders.

“We are very grateful for the support of our customers, suppliers and everybody in the group and look forward to making progress in the year ahead.”