16th Oct 2014 07:43
LONDON (Alliance News) - UK food wholesaler Booker Group PLC Thursday raised its interim dividend by 16% after reporting a higher pretax profit for its half-year, buoyed by a increase in sales on the back of its Makro acquisition.
The group reported a pretax profit of GBP66.7 million for the 24 weeks to September 12, an increase on the prior year's profit of GBP65.1 million.
Total sales in the first half were up 1.9% to GBP2.26 billion, compared with GBP2.22 billion the prior year, boosted by a 12% increase in internet sales to GBP413 million.
It said its businesses Booker Direct, Ritter Courivaud and Chef Direct are performing as planned, while its new Indian business continues to make progress.
Booker like-for-like sales, excluding Makro, were up 2.4% in the period, with non-tobacco sales up 3.4% and tobacco sales up 0.6%. Booker said it is continuing to drive sales by further improving choice, prices and service. The group said it plans to increase its delivery capacity by about 80% in the next two years through utilising the Makro space and upgrading the fleet.
The group declared a 16% increase in its interim dividend to 0.52 pence per share, and said it intends to return around 3.50 pence per share in capital to shareholders, equivalent to around GBP61 million, in July 2015.
However, the group warned on the challenging and competitive environment in the UK food market as of late.
"The group's trading in the first four weeks of the current half year is ahead of the same period last year. We anticipate that the challenging consumer and market environment will persist through the coming year and the UK's food market remains very competitive," the company said in a statement.
Booker said that whilst there is increasing price competition in the UK grocery and discount sectors, it is still on track to deliver an outcome for the financial year "in line with its plans" and to make progress in such a challenging environment.
It said its plans to 'focus, drive and broaden' Booker Group continues to make progress, while its integration of the Makro business remains on track. Makro is a wholesale business which Booker acquired in July 2012.
"We have had a good half and our plan to focus, drive and broaden the business remains on track. Despite the challenges in the UK grocery market we continue to provide our retail, catering and small business customers with improved choice, prices and service via the internet, delivery and cash and carry," said Chief Executive Charles Wilson in the statement.
Booker said it will announced its third quarter trading update on January 15, 2015.
The company's stock was up 0.3% Thursday morning, at 117.70 pence.
By Rowena Harris-Doughty; [email protected]; @rharrisdoughty
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