TIDMBOK
RNS Number : 6548Y
Booker Group PLC
19 May 2016
19 May 2016
Booker Group plc
Final Results of Booker Group plc
for the 52 weeks ended 25 March 2016
This announcement contains the final results of Booker Group plc
('Booker' or the 'Company') for the 52 weeks ended 25 March 2016.
Booker is the UK's leading food wholesaler.
Financial Highlights
-- Total sales GBP5.0bn, +5.0%. Non tobacco sales +6.3% and tobacco sales +2.2%
-- Booker like-for-like total sales -1.9%. Non tobacco sales -0.3% and tobacco sales -5.2%
-- Like-for-like sales to caterers +0.6% including Classic
(+1.9% excluding Classic); and to retailers -2.2%
-- Operating pro t (before exceptionals) GBP155.1m, +11%
-- Profit after tax (post exceptionals) GBP127.8m, +9%
-- Basic earnings per share up 0.51 pence to 7.24 pence
-- Net cash GBP127.4m (2015: GBP147.0m)
-- Final dividend of 4.03 pence per share, taking the total
dividend to 4.60 pence per share (2015: 3.66 pence per share)
-- Proposed return of capital of 3.20 pence per share (2015: 3.50 pence per share)
-- Total return to shareholders of 7.80 pence per share (2015: 7.16 pence per share), +9%
Operational Highlights
-- Our plan to Focus, Drive and Broaden Booker Group continues to make progress
-- Customer satisfaction was strong as we continue to improve
choice, price and service for our customers
-- We made good progress on the catering and retail sides of the business
-- Booker Direct, Ritter Courivaud and Chef Direct had a good year
-- Premier and Family Shopper continued to grow
-- Budgens and Londis have joined the Group and are working well
-- India is on track
-- Internet sales up 12% to GBP979m (excluding Budgens & Londis)
Return of Capital
In July 2012 Booker Group plc issued GBP124m of shareholder
equity to acquire Makro in the UK. Following the successful
integration of Makro into the Group and a period of strong cash
generation, the Board implemented a capital return to shareholders
of 3.50 pence per ordinary share in each of July 2014 and July 2015
at a cost of approximately GBP61m pa. Given the continued
successful development of the Group, the Board is proposing a third
capital return to shareholders of 3.20 pence per ordinary share (at
a cost of approximately GBP57m, based on the current issued share
capital of the Group). It is again proposed that this is achieved
by the issue of a new class of "B" shares which shareholders will
be able to redeem for cash. The return of capital requires the
approval of shareholders, which will be sought at the Annual
General Meeting on 6 July 2016. Further details of the proposed
return of capital will be set out in a circular to shareholders
which will accompany the notice convening this year's Annual
General Meeting.
We currently anticipate returning a similar amount to
shareholders in July 2017 and will provide an update on this at the
2017 Final Results announcement in May 2017 in light of
circumstances prevailing at that time.
Outlook
The Group's trading in the first seven weeks of the current
financial year is ahead of last year. However, we anticipate that
the challenging consumer and market environment will persist
through the coming year and the UK's food market remains very
competitive.
Whilst there is increasing price competition in the UK grocery
and discount sectors, we will continue to deliver our plans to
offer our customers even better choice, prices and service
supported by the continued delivery of our efficiency programmes.
We are on track to deliver an outcome for the new financial year in
line with our plans and to make progress in this challenging
environment.
Charles Wilson, Chief Executive of Booker, said:
"Our plan to Focus, Drive and Broaden the business remains on
track. Booker Group had a good year; customer satisfaction was
strong, sales and profits were the best we have ever achieved. We
made good progress on the integration of Budgens and Londis. We are
very grateful for the support of our customers, suppliers and
people and look forward to making progress in the year ahead."
For further information contact:
Tulchan Communications (PR Adviser to Booker Group plc)
020 7353 4200
Susanna Voyle
Charlotte Church
A presentation for analysts will be held at 8.30am on Thursday
19 May 2016 at Investec, 2 Gresham Street, London, EC2V 7QP
Webcast:
http://www.investis-live.com/booker-group/57067632840ec60a0038c55f/tw85mj4
For further details please contact Charlotte Evans at Tulchan
Communications on 020 7353 4200 or cevans@tulchangroup.com
NOTES:
-- Sales are stated net of value added tax
-- Booker Wholesale supplies independent retailers and caterers
via the internet, delivery and cash and carry
-- Booker India is a wholesaler in India operating from four
sites in Mumbai, one in Surat and, via a joint venture, with one
site in Pune
BUsiness prOFile AND key performance indicators
In the UK, the Group has 200 Business Centres and a national
delivery network.
52 Weeks Customer Sales(2) Sales Sales(3) Sales Sales
Numbers GBPbn GBPbn GBPbn GBPbn GBPbn
000's(1) 2012 2013 2014 2015 2016
Caterers 450 1.22 1.28 1.59 1.62 1.62
Retailers 120 2.56 2.62 2.69 2.76 3.05
SME/Others 707 0.08 0.09 0.40 0.37 0.32
Total 1,277 3.86 3.99 4.68 4.75 4.99
----------- --------- -------- ------ -------- ------ ------
Of our sales, GBP3.43bn is non-tobacco and GBP1.56bn is
tobacco.
52 Weeks Sales(2) Sales Sales(3) Sales Sales
GBPbn GBPbn GBPbn GBPbn GBPbn
2012 2013 2014 2015 2016
Non Tobacco 2.39 2.50 3.17 3.23 3.43
Tobacco 1.47 1.49 1.51 1.52 1.56
Total 3.86 3.99 4.68 4.75 4.99
------------ -------- ------ -------- ------ ------
GBP3.17bn of our sales are collected from the Business Centres
by the customer. GBP1.82bn is delivered to the customers'
premises.
52 Weeks Sales(2) Sales Sales(3) Sales Sales
GBPbn GBPbn GBPbn GBPbn GBPbn
2012 2013 2014 2015 2016
Collected from Business
Centres/stores 2.81 2.84 3.41 3.36 3.17
Delivered to customers'
premises 1.05 1.15 1.27 1.39 1.82
Total 3.86 3.99 4.68 4.75 4.99
------------------------ -------- ------ -------- ------ ------
Substantial progress has been achieved.
2012(2) 2013 2014(3) 2015 2016
Sales Change (52 Weeks) % +7.3 +3.5 +17.3 +1.5 +5.0
Booker Customer Satisfaction % 83.6 84.4 85.4 85.6 85.6
Operating Profit (52
Weeks) GBPm 88.6 97.9 120.4 140.3 155.1
Net Cash GBPm 63.4 77.2 149.6 147.0 127.4
----------------------------- ---- ------- ---- ------- ----- -----
(1) Includes approximately 1,252,000 wholesale customers
(including Makro and Classic, 21,000 of Booker India, 3,000 of
Ritter-Courivaud and 2,000 Budgens & Londis)
(2) 2012 was a 53 week statutory reporting period
(3) Includes Makro from 19 April 2013 (49 weeks)
Operating profit restated for the revision to IAS19 (Revised) in
relation to pension accounting
Operating profit is stated before exceptional items
Includes Budgens & Londis from 14 September 2015 (28
weeks)
chairman's Statement
I am pleased to report that Booker Group has delivered another
good performance. In the 52 weeks to 25 March 2016 sales rose by
5.0% to GBP5.0bn and operating profit (before exceptional items) of
GBP155.1m was up 11%. Customer satisfaction was strong. The
financial performance was good and the Group ended the financial
year with net cash of GBP127.4m. Our "Drive" plans are working well
with progress on the catering and retail sides of the business. Our
like-for-like sales to caterers were +0.6% including Classic (our
on-trade supply business) and +1.9% excluding Classic. Our
like-for-like sales to retailers declined by 2.2% primarily due to
the effects of the ban on small stores displaying tobacco
products.
The plans to 'Broaden' the business are going well. In the 52
weeks to 25 March 2016 Booker distributed GBP1.8bn of product to
our customers' premises versus GBP1.4bn last year as we continue to
expand our delivered service. Digital sales were GBP979m compared
to GBP874m in the previous year and Booker India is making
progress.
On 14 September 2015, Budgens and Londis joined the Group. They
have fitted in well and will help us improve choice, prices and
service to all our retail customers.
Basic earnings per share were 7.24 pence, up from 6.73 pence
last year. Given the strong operational performance and cash flow
of the business the Board recommends the payment of a final
dividend of 4.03 pence per share (2015: 3.14 pence per share)
which, together with the interim dividend, makes a total dividend
for the year of 4.60 pence per share (2015: 3.66 pence per share).
The final dividend is payable on 8 July 2016 to shareholders on the
register on 10 June 2016.
In addition to the final dividend, the Board is recommending a
capital return to shareholders of 3.20 pence per ordinary share (at
a cost of approximately GBP57m, based on the current issued share
capital of the Group). This follows the capital return of 3.50
pence per share to shareholders in each of July 2014 and July 2015.
We currently anticipate returning a similar amount to shareholders
in July 2017.
During the year, Richard Rose stepped down as Chairman. I would
like to thank him for the contribution he made to the Group in his
nine years as Chairman. Bryn Satherley also stepped down from the
Board. In the past ten years Bryn has been responsible for
Property, IT, Supply Chain and Distribution and has made a great
contribution to Booker. In December Gary Hughes joined the Board
and will succeed Andrew Cripps as Chairman of the Audit Committee
after this year's Interim Results in October 2016.
I should like to thank all our colleagues for their contribution
to the success of the Group in the year just ended.
Outlook
The Group's trading in the first seven weeks of the current
financial year is ahead of last year. However, we anticipate that
the challenging consumer and market environment will persist
through the coming year and the UK's food market remains very
competitive.
Whilst there is increasing price competition in the UK grocery
and discount sectors, we will continue to deliver our plans to
offer our customers even better choice, prices and service
supported by the continued delivery of our efficiency programmes.
We are on track to deliver an outcome for the new financial year in
line with our plans and to make progress in this challenging
environment.
Annual General Meeting
Our Annual General Meeting will be held on 6 July 2016. The
notice of Annual General Meeting and a circular setting out further
details of the proposed return of capital, which itself requires
shareholder approval, will be issued to shareholders in due
course.
Stewart Gilliland
Chairman
Chief Executive's Review
Since November 2005 Booker Group has been seeking to 'Focus,
Drive and Broaden' the business. 2015 was a challenging year. In
April 2015 the display of tobacco products was banned in small
shops in the UK. This depressed our retail customer sales.
Continued price deflation depressed top line sales growth and we
suffered the worst Summer weather in recent years. Despite these
challenges the Group continued to make good progress on both the
catering and retail sides of the business.
FOCUS (commenced November 2005)
Booker seeks to become the most efficient operator in our
sector. We continue to improve business efficiency. We 'stop,
simplify and standardise' work and invest most of the resulting
savings in customer service. During the year we bedded down the new
organisation structure. We rolled out our new fleet of vehicles, we
extended the use of "self-scan" and overhauled stock management.
Our close attention to cash has resulted in having GBP127m of net
cash, whilst keeping the Group cost base in line with last year
(pre Budgens and Londis).
DRIVE (commenced March 2006)
Thanks to the hard work of Guy Farrant and the team, Booker
Wholesale/Makro, our cash and carry businesses had a good year. It
served 1,252,000 customers this year. We continue to 'Drive'
choice, price and service for our customers. Each year we survey
45,000 customers to identify where improvements can be made.
Customer satisfaction is a key measure within the business and we
have made significant progress since 2006.
Booker and Makro now have a common business centre operating
structure reporting to Andrew Muldoon. This enables the Group to
move business from one location to another to improve operational
efficiency, health safe and legal objectives and customer
satisfaction. For example, five hundred Premier retailers are now
delivered from Makro business centres rather than Booker.
Choice Up
-- Booker seeks to grow brand and own brand sales.
-- In 2010 we launched Farm Fresh. Sales in the year to 25 March
2016 were GBP65m. This is despite considerable deflation in the
fresh markets. The quality and freshness of the produce is second
to none and can be delivered to our customers within 48 hours of
being harvested.
-- We launched CleanPro in 2014. This range of professional
cleaning products has been well received by customers. We have
50,000 customers buying CleanPro each week with sales of GBP42m per
annum.
-- We continue to improve the "good, better, best" of the offer
in order to satisfy all customers, for example, our new frozen
bread range meets all needs.
Prices Down
-- We operate in a very price competitive market. Every week we
monitor prices versus competitors and during the year our price
index remained competitive. We are continuing to keep our core line
prices at market leading levels to provide the best possible margin
for our customers. During the year we saw significant price
deflation, particularly in the catering sector. Booker has
consistently offered low prices on these core products and
maintains its promise of helping the customer during challenging
times.
Better Service
-- Our people are doing an excellent job. Our customers rate
Booker people highly. Business Centre teams across the Group have
been trained in PRIDE to help improve the Parking, Reception,
Internal, Delivery and Exit experience.
-- We have continued to expand and improve our delivery service.
-- We have more specialist butchers and greengrocers within the
business than last year. We also have skilled fishmongers operating
in our Makro Business Centres.
Business Centre Delivery
-- Booker offers a seven days a week multi-temperature delivery
service to both retail and catering customers (70% of the fleet has
multi temperature capacity). All of our delivery customers pay the
same price for goods as our collect customers. Our delivery
business continues to grow (from GBP600m in 2008/9 to GBP1.8bn in
2015/16).
-- During the year we completed the roll out of our new fleet
comprising 550 vehicles of 3 types. As a result of this, as well as
through separating our Business Centres into small, medium and
large, Booker and Makro has increased Business Centre delivery
capacity.
Categories
-- Our catering, small business and retail customers are served
by our trading teams. These are led by; Dominic Morrey, Fresh and
Ritter, Steve Roper, Drinks and Classic, Colm Johnson our Impulse
categories, Mark Dineen Catering and Adrian McKeon for the Budgens
and Londis businesses. Together with their teams, they report into
Andrew Thompson and Guy Farrant. We really value the support from,
and our relationships with, our suppliers and strive to become
their preferred route to market in the UK.
CATERERS/SMALL BUSINESS
-- In the past two years we have restructured the Group, so that
all our catering and small business customers are coordinated by
Stuart Hyslop and his team. Consequently, Independents, Group
Accounts and National Chains can draw upon the Booker, Makro,
Classic and Chef Direct infrastructures. This has helped strengthen
caterer satisfaction and grown like-for-like catering sales by 0.6%
including Classic, and by 1.9% excluding Classic. This is despite
continued price deflation in the catering market Classic is our on
trade wholesale business. During the year we made the decision to
concentrate our teams on improving our beer, wine and spirits offer
in Booker and Makro and exited some unprofitable keg and on-trade
business.
-- We have also made good progress with Group Accounts, such as
Cosmo and Enterprise Inns, where we serve these accounts from
Booker and Makro.
-- Our Chef Direct business, which serves national accounts from
our distribution centre in Didcot has also had a good year serving
clients including Byron Burgers, Ed's Easy Diner and Wagamama.
RETAILERS
-- All our retail customers, be they Premier, Londis, Budgens,
Family Shopper, retail club members, unaffiliated independents or
retail national accounts are coordinated by Steve Fox and his
team.
Premier
-- Premier, Booker's symbol group, grew to 3,213 stores (3,082
stores last year). Non-tobacco sales to these customers grew by
10%. The retail development team has put a lot of work into both
compliance and building the sales and profits of existing Premier
stores.
-- Premier still remains unique by operating a no cost model for
members, and has the advantage for retailers of providing
deliveries and also the ability to top-up at their local Booker
branch. We install the fascia and imagery free of charge and also
provide a market leading promotion every four weeks. All goods are
delivered at cash and carry prices.
Family Shopper
-- We continue to develop Family Shopper, a local discount
format. This is doing well. At May 2016, we have 42 stores and,
although still early days, the response to this format has been
encouraging.
Budgens & Londis
-- On 14 September 2015 Budgens and Londis joined the Group.
Budgens serves 150 retailers. The Budgens consumer is typically
ABC1. Londis serves 1,469 retailers with approximately 49% of
consumers being ABC1. Since completion of the acquisition, the
teams at Budgens and Londis have fitted into the Group with ease
and have embraced the Group approach to cash, customer satisfaction
and health and safety. Since joining the Group they have generated
GBP13m of cash and customer satisfaction has been good.
Booker Direct
-- Booker Direct serves national retail chains from our
distribution centres with customers including Marks & Spencer,
most of the cinema chains in the UK and the prison service in
England and Wales. Together the Group can now serve any independent
retailer, Group Accounts and National Chains throughout the UK.
BROADEN (commenced April 2007)
In the UK, Booker seeks to offer the best choice, price and
service to caterers, retailers and small business. We also seek to
become the suppliers' preferred route to market. In addition, we
want to sell new products and services and reach new customers. In
India we seek to become the best supplier to Kirana stores. To
achieve these objectives, we are 'Broadening' the business.
'Broaden' includes:
Digital
-- Sales at booker.co.uk were GBP979m, up from GBP874m last year
and GBP15m in 2005. All these sales are delivered to our customers'
premises. We have 490,000 customers registered on the website
compared to 408,000 last year. Customers can view their account
details and order products. We have also doubled the number of
stock keeping units available to a typical customer on the website
through our special order system.
Ritter-Courivaud
-- Ritter-Courivaud is a speciality foods supplier to the UK's
leading restaurants. Ritter had a good year growing sales via the
Makro business centres and direct to customers.
Booker India
-- In September 2009 we opened our first business centre in
Mumbai. We now have four branches in Mumbai, one in Surat and one
joint venture branch in Pune. These serve 21,000 customers, and
have also launched 200 Happy Shopper symbol retailers which harness
the lessons learned from Premier in the UK for the Kirana stores of
Mumbai. We continue to review growth options in India and look
forward to developing the Booker offer to become the best choice,
price and service supplier to Kirana stores and caterers.
Sustainability
-- Booker achieved a fourth consecutive Carbon Trust Standard in
the past year, verifying eight years of emissions reductions. In
addition we have gained a second Carbon Trust Waste Standard,
covering four years of improved waste management.
-- Over 25,500 customers are now recycling with the Group
through our packaging and used cooking oil recycling services. This
helps our customers save money, increase recycling levels and
support more sustainable communities throughout the UK.
-- We are rolling out LED lighting to the majority of Business Centres over the next 3 years.
-- Over 6.7 million litres of used cooking oil has been recycled, up 72% on last year.
-- We donated surplus food equivalent to over half a million
meals to local charities in the last year.
-- We supported customers who were disrupted by the floods
through providing stock and financial assistance.
-- We are committed to helping our retail and catering customers
serve communities throughout the United Kingdom.
PEOPLE
-- Again our team have done a brilliant job this year. We are
committed to continuing to make Booker better and safer for
colleagues. We are also developing talent. For example, there is a
shortage of butchers in the trade, so we have developed a formal
"butchery apprenticeship" with 44 new butchers graduating in the
past year. We developed similar schemes for greengrocers with 36
colleagues graduating and fishmongers with 2 colleagues graduating.
There are currently 146 colleagues participating in this year's
schemes who are due to graduate in September 2016 and we intend to
run all three schemes again in 2017/18. We are also currently
working with The Institute of Meat to raise the skill level of our
Butchery teams further, and to date three butchers have been
awarded the prestigious Master Butcher title. This is part of a
longer term plan to up-skill and develop our future Butchery
Managers who will go through a Craft Butcher training programme
with accreditation.
-- Investment in our delivery teams has continued to make progress:
- Our drivers and managers have annual refresher courses of
Safe, Secure and Legal training and our vocational drivers complete
training for the Certificate of Professional Competence (CPC),
which is run by our team of in-house trainers and delivery support
managers.
- We also run a driver apprenticeship scheme, open to internal
and external drivers who wish to develop their career with Booker
as well as annual training days for managers, to support them by
improving their day to day operation to increase customer
satisfaction and continue helping us to drive cash profit.
-- For the eleventh year running, the performance of the
business means our people have shared in our success through our
bonus system. With this great team of people, Booker will continue
to make progress in the year ahead.
-- During the year Bryn Satherley retired as Group Operations
Director. Bryn has served Booker for the past 10 years and we are
very grateful for the contribution he has made, he remains a good
friend of the Group and we wish him all the best for the
future.
Thanks to the hard work of everybody in the Group, our plan to
Focus, Drive and Broaden the business remains on track. Booker
Group had a good year; customer satisfaction was strong, sales and
profits were the best we have ever achieved. We made good progress
on the integration of Budgens and Londis. We are very grateful for
the support of our customers, suppliers and people and look forward
to making progress in the year ahead.
Charles Wilson
Chief Executive
group finance director's report
Financial Review
The summary of results for the Group is as follows:
2016 2015 Change
GBPm GBPm %
-------------------------- -------- -------- -------
Revenue 4,991.5 4,753.0 + 5
-------------------------- -------- -------- -------
Operating profit (before
exceptional items) 155.1 140.3 + 11
-------------------------- -------- -------- -------
Operating profit (after
exceptional items) 152.8 140.3 +9
-------------------------- -------- -------- -------
Profit before tax 150.8 138.8 + 9
-------------------------- -------- -------- -------
Profit after tax 127.8 117.7 +9
-------------------------- -------- -------- -------
Basic earnings per share
(pence) 7.24 6.73 + 8
-------------------------- -------- -------- -------
Overall Group revenue increased by 5.0% to GBP5.0bn. Non tobacco
like for like sales decreased by 0.3% while like for like tobacco
sales decreased by 5.2%.
Operating margin increased by 0.16 percentage points to 3.11%
(2015: 2.95%) increasing Group operating profit (before exceptional
items) by GBP14.8m to GBP155.1m.
In the current year a net exceptional charge of GBP2.3m was
taken to the income statement. This relates to fees incurred in
relation to the acquisition of Budgens and Londis (GBP2.3m charge),
restructuring costs (GBP4.0m charge) and adjustments to other
provisions (GBP4.0m credit). There were no exceptional items in the
prior year.
The net finance costs of GBP2.0m (2015: GBP1.5m) relates mainly
to the unwind of the discounting of property provisions.
Profit before tax rose GBP12.0m to GBP150.8m (2015: GBP138.8m),
an increase of 9%.
The effective tax rate for the Group of 15.3% (2015: 15.2%) was
below the standard rate of corporation tax in the UK of 20% (2015:
21%). This was due principally to the utilisation of ACT and
partial recognition of tax losses from prior years. The Group holds
significant tax assets (c.GBP48m cash benefit), notably those
inherited as a result of the acquisition of Budgens and Londis in
addition to ACT and Makro tax losses, which continue to be
unrecognised as the quantum and timing of their utilisation remains
uncertain. If the Group is able to utilise these assets, this could
result in the underlying effective rate of tax remaining below the
standard rate for the next three years.
Profit after tax was GBP127.8m, an increase of GBP10.1m compared
to 2015.
Basic earnings per share rose to 7.24p, up 8% from 6.73p in
2015.
Returns to shareholders
a) Dividend
The Board is recommending a final dividend of 4.03 pence per
share (2015: 3.14 pence per share), subject to shareholder approval
at the Annual General Meeting, to be held on 6 July 2016. The final
dividend increases the total dividend for the year to 4.60 pence
per share (2015: 3.66 pence per share).
b) Return of Capital
Given the continued successful development of the Group, the
Board is proposing a capital return to shareholders of 3.20 pence
per ordinary share. It is proposed that this is achieved by the
issue of a new class of "B" shares which shareholders will be able
to redeem for cash. The return of capital requires the approval of
shareholders, which will be sought at the Annual General Meeting on
6 July 2016. Further details of the proposed return of capital will
be set out in a circular to shareholders which will accompany the
notice convening this year's Annual General Meeting.
This will produce a total return to shareholders of 7.80 pence
(2015: 7.16 pence), an increase of 9%.
Budgens and Londis
On 14 September 2015, Musgrave Retail Partners (GB) Ltd and its
subsidiaries were acquired for GBP40m on a cash/debt free basis
with a normalised working capital level. It subsequently changed
its name to Booker Retail Partners GB Ltd ('BRP').
Following the fair valuing of the assets and liabilities,
GBP28.1m of goodwill remained.
Pensions
The Booker Pension Scheme is a defined benefit scheme that was
closed to new members in 2001, and was closed to future accruals
for existing members in 2002. BRP also has two much smaller closed
defined benefit schemes.
At 25 March 2016, the Group had an aggregate net IAS 19 deficit
of GBP29.6m (2015: GBP19.7m), comprising scheme assets of GBP685.2m
and estimated liabilities of GBP714.8m.
Following the 2013 Booker Triennial valuation, there were no
cash contributions required. The next Triennial valuation date is
31 March 2016, and any contributions to the scheme arising
therefrom would be effective from April 2017.
BRP pension contributions were GBP0.8m since the date of
acquisition. Both schemes finalised funding valuations during the
year and agreed no further contributions.
Property Provisions
The Group had property provisions at the balance sheet date of
GBP40.8m (2015: GBP25.4m). The majority of the net movement has
come as a result of the acquisition of Budgens and Londis, where
GBP19.1m of provisions were held on 25 March 2016.
Impairment
The net book value of tangible and intangible fixed assets on
the balance sheet is GBP697m (2015: GBP647m). The goodwill carrying
value is more than supported by expected future cash flows
discounted back to present day values.
Cash Flow
Management has continued to focus on cash resulting in a net
inflow of GBP147.5m, before dividend payments in the year of
GBP65.2m, the capital repayment of GBP61.9m and the acquisition of
Budgens and Londis for GBP40m. Net cash at 25 March 2016 was
GBP127.4m (2015: GBP147.0m).
Borrowing Facilities
The Group entered into a new five year facility in August 2015
comprising an unsecured GBP120.0m revolving credit facility.
The Group's borrowings are subject to covenants set by the
lenders. In the event of a failure to meet certain obligations, or
if there is a covenant breach, the principal amounts due and any
interest accrued are repayable on demand. The financial covenants
are Fixed Charge Cover, measured by the ratio of EBITDAR (earnings
before interest, tax, exceptional items, depreciation, amortisation
and rent) to interest plus rent (tested half yearly on a rolling
basis) being greater than 1.5, and Leverage, measured by the ratio
of net debt to EBITDA (earnings before interest, tax, depreciation
and amortisation) (tested half yearly on a rolling basis) being
less than 3.0.
The Group complied with its covenants throughout the year. At 25
March 2016 the Group achieved a Fixed Charge Cover of 4.3 and
Leverage of nil, comfortably exceeding its covenant obligations. In
addition to these financial covenants the Group's borrowing
agreements include general covenants and potential events of
default. The Group has complied in all respects with the terms of
its borrowing agreements at the date of this report.
Interest Rates
Funds drawn on the revolving credit facility bear floating
interest rates linked to LIBOR plus a margin of 0.80%, where the
ratio of net debt/ EBITDA is less than one. A commitment fee is
payable at 0.28% of the unutilised facility.
Liquidity
At 25 March 2016, the Group held GBP127.4m in cash and cash
equivalents and had undrawn facilities of GBP120.0m. The peak level
of draw down on the revolving credit facility in the year to 25
March 2016 was GBP13m, giving a minimum facility headroom in the
year of GBP107m.
Jonathan Prentis
Group Finance Director
Disclaimer
This announcement may include "forward-looking statements" with
respect to certain of Booker Group plc's ('Group') plans and its
current goals and expectations relating to its future financial
condition, performance and results. These forward-looking
statements sometimes contain words such as 'anticipate', 'target',
'expect', 'intend', 'plan', 'goal', 'believe', 'may', 'might',
'will', 'could' or other words of similar meaning. By their nature,
forward-looking statements involve known and unknown risks and
uncertainties because they relate to future events and
circumstances which may be beyond Booker's control, including,
among other things, UK domestic and global economic and business
conditions, market-related risks such as fluctuations in interest
rates and exchange rates, the policies and actions of regulatory
authorities, the impact of competition, the possible effects of
inflation or deflation, the impact of tax and other legislation and
regulations in the jurisdictions in which Booker operates, as well
as the other risks and uncertainties set forth in our announcement
of preliminary results for the 52 weeks ended 25 March 2016,
released on 19 May 2016. As a result, Booker's actual future
financial condition, performance and results may differ materially
from those expressed or implied by the plans, goals and
expectations set forth in any forward-looking statements, and
persons receiving this presentation should not place reliance on
forward-looking statements.
Booker expressly disclaims any obligation or undertaking (except
as required by applicable law) to update the forward-looking
statements made in this presentation or any other forward-looking
statements it may make or to reflect any change in Booker's
expectation with regard thereto or any changes in events,
conditions or circumstances on which any such statement is based.
Forward-looking statements made in this presentation are current
only as of the date on which such statements are made.
All oral or written forward-looking statements attributable to
the Directors of Booker or persons acting on their behalf are
qualified in their entirety by these cautionary statements.
None of the statements in this presentation are, nor are any
intended to be, a profit forecast and none should be interpreted to
mean that the profits or earnings per share of Booker in the
current or any future financial period necessarily are or will be
above or below the equivalent figure for any previous period.
Consolidated Income Statement
For the 52 weeks ended 25 March 2016
52 weeks ended 25 52 weeks
March 2016 ended 27
March 2015
Before Exceptional
exceptional items
items (Note Total Total
2)
Note GBPm GBPm GBPm GBPm
Revenue 4,991.5 - 4,991.5 4,753.0
Cost of sales (4,737.9) - (4,737.9) (4,524.8)
---------- ---------- ---------- ----------
Gross profit 253.6 - 253.6 228.2
Administrative
expenses (98.5) (2.3) (100.8) (87.9)
---------- ---------- ---------- ----------
Operating profit 155.1 (2.3) 152.8 140.3
Finance costs 3 (2.6) - (2.6) (2.0)
Finance income 3 0.6 - 0.6 0.5
---------- ---------- ---------- ----------
Profit before
tax 153.1 (2.3) 150.8 138.8
Tax 4 (23.0) - (23.0) (21.1)
----------- ----------- ----------- -----------
Profit for the
period attributable
to the owners
of the Group 130.1 (2.3) 127.8 117.7
====== ====== ====== ======
Earnings per share
(Pence)
Basic 5 7.24p 6.73p
====== ======
Diluted 5 7.15p 6.63p
====== ======
All of the Group's operations during the period shown above
represent continuing operations.
There were no exceptional items in the period ended 27 March
2015.
Consolidated Statement of Comprehensive Income
For the 52 weeks ended 25 March 2016
52 weeks 52 weeks
ended ended
25 March 27 March
2016 2015
GBPm GBPm
Profit for the period 127.8 117.7
Items that will not be reclassified
to profit or loss
Remeasurements of the pension
scheme (23.0) (18.5)
Tax on pension scheme remeasurements 3.1 3.7
----------- -----------
Total other comprehensive
expense (19.9) (14.8)
----------- -----------
Total comprehensive income
for the period attributable
to the owners of the Company 107.9 102.9
====== ======
Consolidated Balance Sheet
As at 25 March 2016
25 March 27 March
Note 2016 2015
GBPm GBPm
ASSETS
Non-current assets
Property, plant and equipment 8 229.8 207.1
Intangible assets 466.7 439.8
Investment in joint venture 1.5 1.4
Deferred tax asset 25.3 28.1
---------- ----------
723.3 676.4
Current assets
Inventories 354.1 328.1
Trade and other receivables 180.9 124.5
Cash and cash equivalents 127.4 147.0
---------- ----------
662.4 599.6
---------- ----------
Total assets 1,385.7 1,276.0
---------- ----------
LIABILITIES
Current liabilities
Trade and other payables (677.9) (586.0)
Current tax (21.2) (19.9)
---------- ----------
(699.1) (605.9)
Non-current liabilities
Other payables (26.0) (26.9)
Retirement benefit liabilities 9 (29.6) (19.7)
Provisions (40.8) (25.4)
---------- ----------
(96.4) (72.0)
---------- ----------
Total liabilities (795.5) (677.9)
---------- ----------
Net assets 590.2 598.1
====== ======
EQUITY
Share capital 17.7 17.6
Share premium 44.0 41.2
Merger reserve 260.8 260.8
Capital redemption reserve 122.8 60.9
Other reserves 14.0 75.8
Share option reserve 12.4 11.2
Retained earnings 118.5 130.6
---------- ----------
Total equity attributable
to the owners of the Company 590.2 598.1
====== ======
Consolidated Cash Flow Statement
For the 52 weeks ended 25 March 2016
52 weeks 52 weeks
ended ended
Note 25 March 27 March
2016 2015
GBPm GBPm
Cash flows from operating
activities
Profit before tax 150.8 138.8
Depreciation 23.5 20.3
Amortisation 1.2 0.9
Net finance costs 2.0 1.5
Loss on disposal of property,
plant and equipment 0.1 0.2
Equity settled share based
payments 6.9 5.3
Decrease/(increase) in inventories 4.0 (0.5)
Increase in debtors (7.7) (10.9)
Increase/(decrease) in creditors 19.8 (1.9)
Contributions to pension
scheme (0.8) (2.4)
Decrease in provisions (5.7) (1.4)
---------- ----------
Net cash flow from operating
activities 194.1 149.9
Net interest paid (0.2) (0.2)
Tax paid (18.8) (15.1)
---------- ----------
Cash generated from operating
activities 175.1 134.6
---------- ----------
Cash flows from investing
activities
Acquisition of property,
plant and equipment (25.2) (23.6)
Acquisition of subsidiary,
net of cash acquired 7 (44.5) -
Acquisition of intangible
asset (1.0) (1.0)
Investment in joint venture (0.1) (0.3)
Sale of property, plant
and equipment 0.3 0.5
---------- ----------
Net cash outflow from investing
activities (70.5) (24.4)
---------- ----------
Cash flows from financing
activities
Proceeds from issue of ordinary
shares 2.9 5.0
Redemption of B shares (61.9) (60.9)
Dividends paid (65.2) (56.9)
---------- ----------
Net cash outflow from financing
activities (124.2) (112.8)
---------- ----------
Net decrease in cash and
cash equivalents (19.6) (2.6)
Cash and cash equivalents
at the start of the period 147.0 149.6
----------- -----------
Cash and cash equivalents
at the end of the period 127.4 147.0
====== ======
Reconciliation of net cash flow to movement in net cash in the
period
GBPm GBPm
Net decrease in cash and
cash equivalents (19.6) (2.6)
Opening net cash 147.0 149.6
----------- -----------
Net cash at the end of the
period 127.4 147.0
====== ======
Consolidated Statement of Changes in Equity
52 weeks ended 25 March 2016
Capital Share
Share Share Merger redemption Other option Retained
capital premium reserve reserve reserve reserve earnings Total
GBPm GBPm GBPm GBPm GBPm GBPm GBPm GBPm
At 27 March
2015 17.6 41.2 260.8 60.9 75.8 11.2 130.6 598.1
Profit for the
period - - - - - - 127.8 127.8
Remeasurements
of the pension
scheme - - - - - - (23.0) (23.0)
Tax on pension
scheme
remeasurements - - - - - - 3.1 3.1
---------- ---------- ---------- ---------- ---------- ---------- ---------- ----------
Total
comprehensive
income for the
period - - - - - - 107.9 107.9
Transactions
with
owners:
Dividends to
shareholders - - - - - - (65.2) (65.2)
Issue B shares - - - - (61.8) - - (61.8)
Redemption of
B shares - - - 61.9 - - (61.9) -
Share options
exercised 0.1 2.8 - - - (5.7) 5.7 2.9
Share based
payments - - - - - 6.9 - 6.9
Tax on share
schemes - - - - - - 1.4 1.4
---------- ---------- ---------- ---------- ---------- ---------- ---------- ----------
Total
transactions
with owners 0.1 2.8 - 61.9 (61.8) 1.2 (120.0) (115.8)
---------- ---------- ---------- ---------- ---------- ---------- ---------- ----------
At 25 March
2016 17.7 44.0 260.8 122.8 14.0 12.4 118.5 590.2
====== ====== ====== ====== ====== ====== ====== ======
52 weeks ended 27 March 2015
Capital Share
Share Share Merger redemption Other option Retained
capital premium reserve reserve reserve reserve earnings Total
GBPm GBPm GBPm GBPm GBPm GBPm GBPm GBPm
At 28 March
2014 17.4 36.4 260.8 - 136.8 8.5 136.7 596.6
Profit for the
period - - - - - - 117.7 117.7
Remeasurements
of the pension
scheme - - - - - - (18.5) (18.5)
Tax on pension
scheme
remeasurements - - - - - - 3.7 3.7
---------- ---------- ---------- ---------- ---------- ---------- ---------- ----------
Total
comprehensive
income for the
period - - - - - - 102.9 102.9
Transactions
with
owners:
Dividends to
shareholders - - - - - - (56.9) (56.9)
Issue B shares - - - - (61.0) - - (61.0)
Redemption of
B shares - - - 60.9 - - (60.9) -
Share options
exercised 0.2 4.8 - - - (2.6) 2.6 5.0
Share based
payments - - - - - 5.3 - 5.3
Tax on share
schemes - - - - - - 6.2 6.2
---------- ---------- ---------- ---------- ---------- ---------- ---------- ----------
Total
transactions
with owners 0.2 4.8 - 60.9 (61.0) 2.7 (109.0) (101.4)
---------- ---------- ---------- ---------- ---------- ---------- ---------- ----------
At 27 March
2015 17.6 41.2 260.8 60.9 75.8 11.2 130.6 598.1
====== ====== ====== ====== ====== ====== ====== ======
Notes to the Group Financial Statements
1. General information
a) Overview
Booker Group plc is a public limited company incorporated in the
United Kingdom (Registration number 05145685). The Company is
domiciled in the United Kingdom and its registered address is
Equity House, Irthlingborough Road, Wellingborough,
Northamptonshire, NN8 1LT.
b) Status of financial information
The financial information set out herein does not constitute the
Company's statutory accounts for the 52 weeks ended 25 March 2016
or the 52 weeks ended 27 March 2015 but is derived from those
accounts. Statutory accounts for 2015 have been delivered to the
Registrar of Companies, and those for 2016 will be delivered in due
course. The auditors have reported on those accounts; their report
was (i) unqualified, (ii) did not include references to any matters
to which the auditors drew attention by way of emphasis without
qualifying their report, and (iii) did not contain statements under
sections 498(2) or 498(3) of the Companies Act 2006.
c) Basis of accounting
In accordance with EU law (IAS Regulation EC 1606/2002), the
group financial statements have been prepared in accordance with
International Financial Reporting Standards ('IFRS') adopted for
use in the EU as at 25 March 2016 ('adopted IFRS'), International
Financial Reporting Interpretations Committee ('IFRIC')
interpretations and those parts of the Companies Act 2006
applicable to companies reporting under IFRS. The preliminary
results consolidate those of the Company and its subsidiaries
(together referred to as the 'Group').
d) Basis of consolidation
Subsidiaries are entities controlled by the Group. Control
exists when the Group is exposed to, or has rights to, variable
returns from its involvement with an entity and has the ability to
affect those returns through its power to direct the relevant
activities. In assessing control, potential voting rights that are
currently exercisable or convertible are taken into account. The
financial statements of subsidiaries are included in the
consolidated financial statements from the date that control
commences until the date that control ceases.
e) Accounting standards adopted in the period
The following Adopted IFRSs have been issued and applied by the
Group in these financial statements for the first time.
New standards: None
The Group has adopted the following amendments and
interpretations:
-- Amendments to IAS19 'Defined benefit plans: Employee contributions'
-- Annual Improvements to IFRSs 2010-12 cycle
-- Annual Improvements to IFRSs 2011-13 cycle
Their adoption does not have a material effect on the financial
statements.
2. Exceptional items 2016 2015
GBPm GBPm
Included within administrative
expenses:
Restructuring costs 4.0 -
Acquisition costs 2.3 -
Release of other provisions (4.0) -
---------- ----------
2.3 -
====== ======
Restructuring costs of GBP4.0m relate primarily to redundancy
costs to align staffing levels across the branch network.
Acquisition costs were incurred during the acquisition of BRP (see
note 9) and were, in the main, fees in relation to legal and
professional services. The GBP4.0m release of other provisions
stems from a reassessment of the likelihood of crystallisation of
certain liabilities reserved for many years ago.
3. Finance costs and income 2016 2015
GBPm GBPm
Interest on bank loans and overdrafts (0.8) (0.7)
Interest on pension scheme liabilities (0.5) -
Unwinding of discount on property
provisions (1.3) (1.3)
---------- ----------
Finance costs (2.6) (2.0)
---------- ----------
Bank interest receivable 0.6 0.5
---------- ----------
Finance income 0.6 0.5
---------- ----------
Net finance costs (2.0) (1.5)
====== ======
4. Tax 2016 2015
GBPm GBPm
Current tax expense 24.1 20.9
Deferred tax (1.1) 0.2
---------- ----------
Total tax charge 23.0 21.1
====== ======
Effective tax rate 15.3% 15.2%
====== ======
Reductions in the UK corporation tax rate from 23% to 21%
(effective from 1 April 2014) and 20% (effective from 1 April 2015)
were substantively enacted on 2 July 2013. Further reductions to
19% (effective from 1 April 2017) and to 18% (effective 1 April
2020) were substantively enacted on 26 October 2015. The deferred
tax asset at 25 March 2016 has been calculated based on these
rates.
An additional reduction to 17% (effective from 1 April 2020) was
announced in the Budget on 16 March 2016. This will reduce the
group's future current tax charge and the value of its deferred tax
asset accordingly.
5. Earnings per share
a) Basic earnings per share
Basic earnings per share is calculated by dividing the profit
for the period attributable to the owners of the Group by the
weighted average number of ordinary shares outstanding during the
period.
2016 2015
Profit for the period attributable
to the owners of the Group (GBPm) 127.8 117.7
Weighted average number of shares
(m) 1,765.2 1,748.1
Basic earnings per share (pence) 7.24p 6.73p
====== ======
b) Diluted earnings per share
Diluted earnings per share is based on the weighted average
number of ordinary shares in issue adjusted by dilutive outstanding
share options and dilutive shares issuable under the Group's share
plans. The number of shares included in the diluted EPS in relation
to the SAYE and the share option schemes has been calculated in
accordance with IAS33 'Earnings per Share'.
2016 2015
Profit for the period attributable
to the owners of the Group (GBPm) 127.8 117.7
Weighted average number of shares
(m) used in basic EPS 1,765.2 1,748.1
Effects of employee share options
(m) 22.4 26.7
---------- ----------
Weighted average number of shares
(m) used in diluted EPS 1,787.6 1,774.8
---------- ----------
Diluted earnings per share (pence) 7.15p 6.63p
====== ======
6. Dividends and return of capital
a) Dividends charged to reserves 2016 2015
GBPm GBPm
Final dividend of 3.14 pence per
share (2015: 2.75 pence per share)
paid in respect of the prior period 55.2 47.8
Interim dividend of 0.57 pence
per share (2015: 0.52 pence per
share) paid in respect of the current
period 10.0 9.1
-------- --------
65.2 56.9
===== =====
The Directors are proposing a final dividend of 4.03 pence per
share, which will absorb approximately GBP72m of distributable
reserves.
b) Return of Capital
The Board is proposing to implement another capital return to
shareholders of 3.20 pence per ordinary share (at a cost of
approximately GBP57m, based on the current issued share capital of
the company). It is proposed that this is achieved by the issue of
a new class of "B" shares. The return of capital requires the
approval of shareholders, which will be sought at the AGM on 6 July
2016.
7. Business combination
On 14 September 2015, the Group acquired the entire share
capital of Musgrave Retail Partners GB Limited and its'
subsidiaries ('Budgens and Londis') for GBP40m on a cash/debt free
basis with a normalised working capital level. This resulted in
overall consideration of GBP110.9m being the sum of GBP40.0m plus
net cash acquired of GBP66.4m and a working capital adjustment of
GBP4.5m. The acquisition had the following effect on the Group's
assets and liabilities:
Fair
Book value value Fair
adjustments value
GBPm GBPm GBPm
Property, plant and equipment 18.6 2.8 21.4
Inventories 30.9 (0.9) 30.0
Trade and other receivables 53.2 (4.5) 48.7
Cash & cash equivalents 66.4 - 66.4
Trade and other payables (71.7) (0.6) (72.3)
Provisions (15.8) (4.0) (19.8)
Retirement benefit asset 2.3 10.5 12.8
Deferred tax liability - (4.4) (4.4)
---------- ---------- ----------
Net fair value of identifiable
assets and liabilities 83.9 (1.1) 82.8
====== ======
Goodwill 28.1
----------
Cash consideration 110.9
======
8. Property, plant and equipment
2016 2015
Net book value GBPm GBPm
At start of period 207.1 204.5
Acquired (see note 7) 21.4 -
Additions 25.2 23.6
Disposals (0.4) (0.7)
Depreciation charge (23.5) (20.3)
---------- ----------
At end of period 229.8 207.1
====== ======
9. Retirement benefit liabilities
2016 2015
Movement in the net defined GBPm GBPm
benefit liability
At start of period (19.7) (3.6)
Employer contributions 0.8 2.4
Net asset acquired (see note 12.8 -
7)
Net charge recognised in the (0.5) -
income statement (see note
3)
Total remeasurements included
in OCI (23.0) (18.5)
---------- ----------
At end of period (29.6) (19.7)
====== ======
This information is provided by RNS
The company news service from the London Stock Exchange
END
FR EAKSPFESKEFF
(END) Dow Jones Newswires
May 19, 2016 02:01 ET (06:01 GMT)
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