5th Jun 2014 14:22
For Immediate Release
5 June 2014
Booker Group plc ('Booker' or 'the Group')
ANNUAL REPORT AND ACCOUNTS
POSTING OF CIRCULAR CONTAINING THE NOTICE OF ANNUAL GENERAL MEETING AND DETAILS OF THE PROPOSED RETURN OF CAPITAL
Booker Group plc announces today the posting of a circular (the "Circular") to its shareholders containing the notice of Annual General Meeting ("AGM") together with details of the proposed return of capital of 3.5 pence per ordinary share by way of a B share scheme, which was announced at the time of the Company's preliminary results on 22 May 2014. The total value of the return of capital would equate to approximately £61 million (based on Booker's current issued share capital).
Associated proxy forms and Booker's annual report and financial statements for the 52 week period ended 28 March 2014 ("Annual Report and Financial Statements") are also being sent to shareholders with the Circular. The AGM will be held at Booker Branch Wimbledon, Endeavour Way, Durnsley Road, London SW19 8PL on 9 July 2014 at 11 a.m.
Copies of the Circular (including Notice of AGM) and the Annual Report and Accounts are available on Booker's website www.bookergroup.com and have been submitted to the National Storage Mechanism where they will shortly be available for inspection at https://www.morningstar.co.uk/uk/NSM.
Copies of the Circular will also be available for inspection at the offices of Clifford Chance LLP, 10 Upper Bank Street, London, E14 5JJ during usual business hours (excluding weekends and English public holidays) until the conclusion of the AGM and at the AGM itself for at least 15 minutes prior to the AGM until the meeting ends.
Return of Capital highlights
· Shareholders to receive 3.5 pence per ordinary share, equating to an aggregate return of approximately £61 million
· Return to be implemented by way of a B share scheme, under which shareholders (other than those resident in a Restricted Territory) will have a choice as to the timing of redemption of their B shares and the receipt of their cash proceeds
· Cheques expected to be despatched to shareholders or accounts credited (as appropriate) in respect of the Initial Redemption Option by 29 July 2014
· Cheques expected to be despatched to shareholders or accounts credited (as appropriate) in respect of the Deferred Redemption Option by 7 May 2015
The Board currently anticipates returning a similar amount of capital to shareholders in July 2015 and will provide an update on this at the 2015 preliminary results announcement in May 2015, in light of circumstances prevailing at that time.
Terms used in this announcement but which are otherwise undefined shall have the same meanings as set out in the Circular. This announcement and the summary of the proposed Return of Capital should be read in conjunction with the Circular.
Details of the Return of Capital
1. Introduction
The Board is proposing to implement a capital return to shareholders of approximately £61 million which is to be achieved by the issue of a new class of B Shares which shareholders will be able to redeem for cash. Under the B Share Scheme, shareholder will receive one B share for every 1 ordinary share held at the B Share Record Time (expected to be 5.00 p.m. on 9 July 2014) and each B Share will be redeemed by the Company for 3.5 pence in cash.
This is in addition to the proposed final ordinary dividend of 2.75 pence per ordinary share which, if approved at the AGM, will be paid on 11 July 2014 to shareholders on the register at the close of business on 13 June 2014.
The B Share Scheme and certain related matters require the approval of shareholders which will be sought at the AGM, notice of which is set out in the Circular. If the B Share Resolution is not passed at the AGM, the Return of Capital by way of B Share Scheme will not proceed. The B Share Resolution is a special resolution and will be passed if at least 75% of votes are in favour.
2. The Return of Capital and the Redemption Alternatives
Shareholders should read Part V of the Circular which outlines the tax consequences of the B Share Scheme in the UK. Shareholders who are in any doubt as to their tax position, or who are subject to taxation in a jurisdiction other than the UK, should consult an appropriate professional adviser.
All shareholders will receive one B Share for each corresponding ordinary share held at the B Share Record Time. Eligible Shareholders will be able to choose between the Initial Redemption Option and the Deferred Redemption Option, or any combination of the two, in respect of their B Share Entitlement in order to determine when they receive their cash proceeds under the B Share Scheme.
The procedures for making elections between the Redemption Alternatives are set out in Parts VI and VII of the Circular. Eligible Shareholders who do not make a valid election, and all Overseas Shareholders resident, or with a registered address, in a Restricted Territory (see below for further details), will be automatically deemed to have elected for the Initial Redemption Option in respect of ALL of their B Share Entitlement. Accordingly shareholders who wish to have all of their B Share Entitlement redeemed for cash on 22 July 2014 under the Initial Redemption Option do not need to return a Form of Election, or make an election in CREST (as applicable).
Alternative 1 (Initial Redemption Option)
For shareholders who elect or who are deemed to have elected for the Initial Redemption Option in respect of all or some of their B Share Entitlement, which includes all Restricted Shareholders, it is expected that each relevant B Share will be redeemed by Booker for 3.5 pence on 22 July 2014 and each such share will be cancelled on redemption. Redemption proceeds are expected to be paid to relevant shareholders by 29 July 2014.
Alternative 2 (Deferred Redemption Option)
For Eligible Shareholders who validly elect for the Deferred Redemption Option in respect of all or some of their B Share Entitlement, it is expected that each relevant B Share will be redeemed by Booker for 3.5 pence on 30 April 2015 and each such share will be cancelled on redemption. It is expected that the redemption proceeds will be paid to relevant shareholders by 7 May 2015.
The expected timetable of events in respect of the B Share Scheme and the timing of the AGM are as set out below (all times referred to are London times):
Latest time and date for receipt of Form of Proxy and CREST Proxy Instructions for Annual General Meeting | 11.00 a.m. on 7 July 2014 |
Annual General Meeting | 11.00 a.m. on 9 July 2014 |
Record Time for entitlement to B Shares | 5.00 p.m. on 9 July 2014 |
CREST accounts credited with "interim CREST entitlements" in respect of Ordinary Shares | 10 July 2014 |
Payment of final dividend for the year ended 28 March 2014
| 11 July 2014 |
Election Deadline: latest time and date for receipt of Form of Election or submitting CREST elections | 3.00 p.m. on 18 July 2014 |
B Shares issued, and B Shares in respect of elections made under the Deferred Redemption Option enabled in CREST | 21 July 2014 |
Redemption of B Shares pursuant to the Initial Redemption Option | 22 July 2014 |
Despatch of cheques or, if held in CREST, CREST accounts credited in respect of proceeds under the Initial Redemption Option | by 29 July 2014 |
Despatch of share certificates for B Shares being redeemed pursuant to the Deferred Redemption Option
|
by 29 July 2014 |
Redemption of B Shares pursuant to the Deferred Redemption Option | 30 April 2015 |
Despatch of cheques or, if held in CREST, CREST accounts credited in respect of proceeds under the Deferred Redemption Option | by 7 May 2015 |
Shareholders should read the entirety of the Circular which contains further important information about Booker and full details of the Return of Capital.
3. Overseas Shareholders
The attention of those shareholders who are not resident in the United Kingdom or who are citizens or nationals of other countries is drawn to the information set out in paragraph 5 of Part III of the Circular.
In particular, the Deferred Redemption Option is not being made available to Overseas Shareholders resident, or with a registered address, in a Restricted Territory, and all such shareholders will be deemed to have elected for the Initial Redemption Option in respect of all of their B Share Entitlements. The B Share Entitlements of Restricted Overseas Shareholders are to be issued to a nominee and redeemed under the Initial Redemption Option with the redemption proceeds then being remitted to such shareholders. Furthermore, Overseas Shareholders (other than those in Restricted Territories) should note that, by making a valid election for the Deferred Redemption Option, such shareholders will be deemed to represent, warrant and undertake and/or agree (as applicable) to the terms set out in paragraph 5 of Part III of the Circular. The tax consequences of the Return of Capital may vary for Overseas Shareholders and accordingly such shareholders should consult their own independent professional adviser without delay.
4. Recommendations
The Board considers the terms of the B Share Scheme and each of the Resolutions to be proposed at the AGM (including the B Share Resolution) to be in the best interests of shareholders as a whole and is recommending that shareholders vote in favour of the Resolutions (including the B Share Resolution) to be proposed at the AGM, as the Directors intend to do for their respective individual beneficial holdings of, in aggregate, 128,139,803 Ordinary Shares, representing approximately 7.35 per cent. of the total issued share capital of the Company as at 28 May 2014 (being the latest practicable date prior to the publication of the Circular).
The Board makes no recommendation to shareholders in relation to any election(s) they may make under the Redemption Alternatives. Shareholders need to take their own decision in this regard and are recommended to consult their own independent professional adviser.
None of the B Shares have been or will be registered under the US Securities Act or the state securities laws of the United States and none of them may be offered or sold in the United States or to any US persons unless pursuant to a transaction that has been registered under the US Securities Act and the relevant state securities laws or a transaction that is not subject to the registration requirements of the US Securities Act and the state securities laws, either due to an exemption therefrom or otherwise.
Neither the B Shares nor this announcement has been approved, disapproved or otherwise recommended by any US federal or state securities commission or other regulatory authority or any non US securities commission or regulatory authority nor have such authorities passed upon or endorsed the merits of the Return of Capital or confirmed the accuracy or determined the adequacy of this document. Any representation to the contrary is a criminal offence in the United States.
The release, publication or distribution of this announcement in certain jurisdictions may be restricted by law and therefore persons in such jurisdictions into which this announcement is released, published or distributed should inform themselves about and observe such restrictions.
This announcement does not constitute or form part of an offer to sell or the solicitation of an offer to subscribe for any securities or an invitation to participate in the B Share Scheme in or from any jurisdiction in or from which, or to or from whom, it is unlawful to make such offer or participate under applicable securities laws or otherwise.
Information relating to the Annual Reports and Accounts
The Group announced its preliminary results for the 52 weeks ended 28 March 2014 on 22 May 2014.
The Group today provides the following additional regulated information, in relation to the Annual Report and Accounts, in full unedited text as required to be made public under the Disclosure and Transparency Rules. This announcement should be read together with the preliminary results announcement.
A condensed set of financial statements were attached to the Group's preliminary results announcement which included an indication of important events that occurred during the year. The Annual Report and Accounts also contains information regarding the Group's principal risks and uncertainties, related party transactions and a responsibility statement relating to its content; an extract of this information is provided below as is required under the Disclosure and Transparency Rules.
Risks and Uncertainties
The principal risks and corresponding mitigation set out below represent the principal uncertainties that the Board believes may impact the Group's ability to deliver effectively its strategy in the future. The list does not include all risks that the Group faces and it does not list the risks in any order of priority.
Risk | Impact | Mitigating Factors |
Increasing price competition in the UK grocery and discount sectors | A decline in selling prices could have an adverse impact on the Group's sales and operating profits.
| We will continue to offer our customers even better choice, price and service supported by the continued delivery of the Makro synergy plans and our efficiency programmes. |
Failure to respond to competition
| This could have an adverse impact on the Group's sales and operating profits.
| The industry is extremely competitive with the market being served by numerous competitors, ranging from national multiple retailers to regional independent wholesalers. The Group competes by closely monitoring the activities of competitors and ensuring it continues to improve the choice, price and service to its customers.
|
Changes in regulation | Changing legislation may impact our ability to market or sell certain products or could cause the Group to incur additional costs or liabilities that could adversely affect its business.
| The Group operates in an environment governed by strict regulations to ensure the safety and protection of customers, shareholders, employees and other stakeholders and the operation of an open and competitive market. These regulations include food hygiene, health and safety, data protection, the rules of the London Stock Exchange and competition law. In all cases, the Board takes its responsibilities very seriously, and recognises that any breach of regulation could cause reputational and financial damage to the Group.
|
Product quality and safety
| This could have an adverse impact on the Group's reputation, sales and operating profits.
| The quality and safety of our products is of critical importance and any failure in this regard would affect the confidence of our customers in us. We work with our suppliers to ensure the integrity of the products supplied. Food hygiene practices are taken very seriously throughout the Group, and are monitored both through internal audit procedures and by external bodies such as environmental health departments. We have well prepared procedures for crisis management in order to act quickly when required. We are aware that if we fail, or are perceived to have failed, to deliver to our customers' satisfaction the expected standards of quality and safety in our products their loyalty to us may be potentially impacted. This in turn could adversely impact on our market share and our financial results.
|
Employee engagement and retention
| The continued success of the Group relies heavily on the investment in the training and development of our employees.
| The Group's employment policies, remuneration and benefits packages are designed to be competitive, as well as providing colleagues with fulfilling career opportunities. The Group continually engages with employees across the business to ensure that we keep strengthening our team at every level.
|
Supplier credit | Availability of supplier credit is essential for the Group's financial performance. If the providers of credit insurance withdraw or materially reduce the levels of cover they provide, this might affect the Group's ability to obtain products from those suppliers.
| The Group Finance Director regularly meets key credit insurers to ensure that they have an up to date view of the Group's financial position.
|
Pension funding | A worsening funding position may require the Group to invest additional cash contributions or provide further assurance to cover future liabilities. | The Group seeks to agree appropriate investment policies with the Trustee and closely monitors the funding position with the Trustee. Both the Company and the Trustee take advice from independent qualified actuaries.
|
Failure of the Group's information technology systems
| The maintenance and development of information technology systems may result in system failures, including cyber security breaches which may adversely impact the Group's ability to operate.
| The Group has appropriate controls in place to mitigate the risk of systems failure, including systems back up procedures and disaster recovery plans, and also has appropriate virus protection and network security controls.
|
Related Party Transactions
During the year, there were no transactions or balances between the Group and its key management personnel or members of their close family apart from:
• the Group purchases stock from:
o Molson Coors Brewing Co (UK) Ltd - Lord Bilimoria is the Chairman of the Cobra Beer Partnership Ltd, a joint venture with Molson Coors Brewing Co (UK) Ltd;
o C&C Group plc, of which Stewart Gilliland is a Non-Executive Director;
o Tulip International (UK) Ltd, of which Stewart Gilliland is a Non-Executive Director;
o Boparan Holdings Ltd, of which Andrew Cripps is a Non-Executive Director.
• and the Group sells stock to:
o Mitchells & Butlers plc, of which Stewart Gilliland is a Non-Executive Director;
o Food & Fuel Ltd, of which Karen Jones is the Chairman.
All transactions with related parties involve the normal supply of goods and are priced on an arm's length basis.
At the prior period end, Makro was a related party, on the basis that it was not consolidated at the period end, and it was owed £5.6m (shown within Trade and other payables) from the Group which comprised:
• £8.8m of cash advanced from Makro; and
• £3.2m of competition fees recharged to Makro.
Directors' responsibility statement
The directors, as at the date of the Annual Report and Accounts, confirm that to the best of their knowledge:
· the group and parent company financial statements, prepared in accordance with the applicable set of accounting standards, give a true and fair view of the assets, liabilities, financial position and profit or loss of the company and the undertakings included in the consolidation as a whole; and
· the strategic report includes a fair view of the development and performance of the business and the position of the issuer and the undertakings included in the consolidation taken as a whole, together with a description of the principal risks and uncertainties that they face.
For further information contact:
Tulchan Communications (PR Adviser to Booker Group plc)
020 7353 4200
Susanna Voyle
Will Smith
Related Shares:
Booker Group