9th Oct 2008 07:00
Booker Group plc
Interim results for the 24 weeks ended 12 September 2008
This announcement contains the interim results of Booker Group plc ("Booker") for the 24 weeks ended 12 September 2008.
Financial Highlights
Total sales £1.5 billion, +2.1%
Like-for-like sales in the half were:
non-tobacco +4.1% (vs +3.5% last year)
tobacco -3.2% (vs -3.9% last year)
total +1.1% (vs +0.4% last year)
Operating profit up to £30.5m from £24.1m (+26.6%)
Profit before tax of £26.5m versus £20.6m last year (+28.6%)
Profit after tax up to £22.0m from £16.8m (+31.0%)
Basic earnings per share at 1.48 pence up from 1.17 pence last year
Net debt reduced to £28.9m from £46.9m last year
The Board declares an interim dividend of 0.2 pence per share (2007: nil) to be paid on 28 November 2008*
Operating Highlights
Customer satisfaction for choice, price and service has improved
Conversion of another 11 branches into 'Extra' format, taking the total number of 'Extra' branches to 45. An additional 21 are planned for the second half
Internet sales increased to £96m from £34m last year
Booker Direct (formerly Blueheath) is making good progress
Outlook
Group turnover in the first period of the second half is ahead of the same period last year. Inventory levels and costs are in line with plan. Overall, Booker Group plc continues to trade in line with management expectations.
Commenting on the results, Charles Wilson, Chief Executive of Booker, said,
"Despite the challenging business environment, Booker continues to make good progress. Through improving choice, price and service we are gaining a larger spend from our customers. Plans to 'Broaden' the business are progressing well. Our internet sales increased to £96m (£34m last year) and we have become a major force in the delivered wholesale market."
For further information contact:
Tulchan Communications (PR Adviser to Booker Group plc)
020 7353 4200
Susanna Voyle
Investec (Nominated Adviser to Booker Group plc)
020 7597 5970
Keith Anderson
A presentation for analysts will be held at 08.30am on Thursday 9 October 2008 at Tulchan's offices. For further details please call Lucy Legh at Tulchan Communications on 0207 353 4200.
* Note: The record date will be 31 October 2008 and the ex-dividend date will be 29 October 2008
Chairman's Statement
I am delighted to report on a good performance for the half year to 12 September 2008.
Sales for the 24 week period were £1.5 billion, an increase of 2.1%. Half year profit before tax was £26.5 million (2007: £20.6 million), up 28.6%, including property related profit of £1.1m (2007: nil). Basic earnings per share increased by 23.9% to 1.48 pence (2007: 1.17 pence). Net debt reduced by 38.4% to £28.9 million (2007: £46.9 million).
Booker is continuing to 'drive' sales by offering 'choice up, prices down and better service'. Non-tobacco sales showed an increase of 4.1%. The drive into the catering market is working with sales to caterers having increased by 4.7%. Sales to retailers have decreased by 0.5% due to the smoking ban in public places. Premier, our retail symbol group, continued to grow and now has 2,195 outlets. Our prices overall have remained competitive and stock availability has been good. These factors are reflected in further improvements in customer satisfaction levels.
Significant progress has been made in reducing net debt to £28.9 million at the end of the period compared to £46.9 million at the same time last year. This has been achieved through a combination of strong operating cashflow and the efficient management of working capital.
The plans to 'broaden' the business are going well. We converted a further 11 branches to the 'Extra' format during the period. We now have 45 'Extras' which offer a broader range and better environment for customers. 'Extra' branches recorded a sales uplift on the prior year of 5%, compared to non-converted branches, achieving payback on the conversion costs in less than a year.
Booker.co.uk is performing well with internet sales in the half at £96m, up over 182% versus last year.
Booker Direct (formerly Blueheath) has become a leading force in the delivered wholesale market. We are proud to now be the UK's largest supplier to the entertainment industry supplying Vue Cinemas, Odeon and Rank. We have also won accounts in the retail, catering and public service sectors.
Following the changes in the shareholder base, which were announced on 24 June 2008, Hans Kristian Hustad and Jim McMahon resigned as non-executive directors. We would like to thank them for the contribution they have made to Booker during the past three years.
I have pleasure in announcing that Bryan Drew, Commercial Director, and Bryn Satherley, Operations Director, will be joining the Board on 12 November 2008. Both have made a major contribution to the Booker recovery.
During the period the Group announced a new Performance Share Plan (PSP) and Save as you Earn Scheme. Awards under the PSP will vest over a three year period, subject to continued employment and share price targets being met. A quarter of the shares subject to each award will vest on reaching share prices of 28.75p, 30.5p, 34.5p and 46p over a consecutive 60 day period.
Booker's strategy to drive and broaden its business is working. In a challenging environment we continue to make good progress. As a result the Board declares an interim dividend of 0.2 pence per share (2007: nil) to be paid on 28 November 2008.
Outlook
Group turnover in the first period of the second half is ahead of the same period last year. Inventory levels and costs are in line with plan. Overall, Booker Group plc continues to trade in line with management expectations.
Richard Rose
Chairman
Any forward looking statements made throughout this document represent management's best judgement as to what may occur in the future. However, the group's actual results for the current and future fiscal periods and corporate developments will depend on a number of economic, competitive and other factors, some of which will be outside the control of the group. Such factors could cause the group's actual results for future periods to differ materially from those expressed in any forward looking statements made in this document.
Consolidated Income Statement
For the 24 weeks ended 12 September 2008
|
Note |
24 weeks ended 12 September 2008 |
24 weeks ended 14 September 2007 |
52 weeks ended 28 March 2008 |
|
|
* Restated |
||||
|
£m |
£m |
£m |
||
|
Revenue |
1,496.9 |
1,465.4 |
3,078.2 |
|
|
Cost of sales |
(1,446.6) |
(1,421.0) |
(2,987.1) |
|
|
---------- |
---------- |
---------- |
||
|
Gross profit |
50.3 |
44.4 |
91.1 |
|
|
Administrative expenses |
2 |
(19.8) |
(20.3) |
(45.0) |
|
--------- |
--------- |
--------- |
||
|
Operating profit |
30.5 |
24.1 |
46.1 |
|
|
Finance income |
3 |
1.2 |
2.4 |
3.8 |
|
Finance expenses |
3 |
(5.2) |
(5.9) |
(13.7) |
|
---------- |
---------- |
---------- |
||
|
Net financing costs |
(4.0) |
(3.5) |
(9.9) |
|
|
Profit before tax |
26.5 |
20.6 |
36.2 |
|
|
Tax |
4 |
(4.5) |
(3.8) |
(6.4) |
|
---------- |
---------- |
---------- |
||
|
Profit for the period |
22.0 |
16.8 |
29.8 |
|
|
====== |
====== |
====== |
||
|
Basic earnings per share (Pence) |
6 |
1.48p |
1.17p |
2.04p |
|
====== |
====== |
====== |
||
|
Diluted earnings per share (Pence) |
6 |
1.47p |
1.17p |
2.03p |
|
====== |
====== |
====== |
* the profit for the 24 weeks ended 14 September 2007 has been reduced by £0.5m following clarification of IAS 17 'Leases' by the International Financial Reporting Interpretations Committee ('IFRIC').
Consolidated Statement of Recognised Income and Expense
For the 24 weeks ended 12 September 2008
|
24 weeks ended 12 September 2008 |
24 weeks ended 14 September 2007 |
52 weeks ended 28 March 2008 |
||
|
Restated |
||||
|
£m |
£m |
£m |
||
|
Actuarial (loss)/gain on defined benefit plan |
(14.8) |
32.0 |
23.8 |
|
|
Deferred tax recognised on actuarial (loss)/gain |
4.2 |
(9.6) |
(6.6) |
|
|
Effective portion of change in the fair value of interest rate hedge |
0.6 |
- |
(2.9) |
|
|
---------- |
---------- |
---------- |
||
|
Net (expenses)/income recognised directly in equity |
(10.0) |
22.4 |
14.3 |
|
|
Profit for the period |
22.0 |
16.8 |
29.8 |
|
|
---------- |
---------- |
---------- |
||
|
Total recognised income and expense for the period attributable to equity holders of the parent |
12.0 |
39.2 |
44.1 |
|
|
====== |
====== |
====== |
Consolidated Balance Sheet
As at 12 September 2008
|
Note |
12 September 2008 |
14 September 2007 |
28 March 2008 |
|
|
Restated |
||||
|
£m |
£m |
£m |
||
|
ASSETS |
||||
|
Non-current assets |
||||
|
Property, plant and equipment |
57.3 |
60.2 |
60.2 |
|
|
Intangible assets |
423.9 |
423.2 |
423.9 |
|
|
Retirement benefit assets |
8 |
1.6 |
7.1 |
9.8 |
|
Deferred tax asset |
8.2 |
- |
5.6 |
|
|
---------- |
---------- |
---------- |
||
|
491.0 |
490.5 |
499.5 |
||
|
Current assets |
||||
|
Inventories |
189.0 |
181.2 |
184.7 |
|
|
Trade and other receivables |
58.8 |
62.4 |
54.3 |
|
|
Cash and cash equivalents |
10 |
43.5 |
41.1 |
41.0 |
|
Other financial assets |
- |
0.6 |
- |
|
|
---------- |
---------- |
---------- |
||
|
291.3 |
285.3 |
280.0 |
||
|
---------- |
---------- |
---------- |
||
|
Total assets |
782.3 |
775.8 |
779.5 |
|
|
---------- |
---------- |
---------- |
||
|
LIABILITIES |
||||
|
Current liabilities |
||||
|
Other interest bearing loans and borrowings |
10 |
- |
(0.6) |
(0.3) |
|
Trade and other payables |
(360.7) |
(357.0) |
(347.9) |
|
|
Tax liabilities |
(19.4) |
(11.3) |
(16.5) |
|
|
Other financial liabilities |
(1.2) |
- |
(2.0) |
|
|
---------- |
---------- |
---------- |
||
|
(381.3) |
(368.9) |
(366.7) |
||
|
Non-current liabilities |
||||
|
Other interest bearing loans and borrowings |
10 |
(72.4) |
(87.4) |
(87.9) |
|
Other payables |
(27.9) |
(27.7) |
(27.9) |
|
|
Provisions |
(41.7) |
(42.1) |
(42.4) |
|
|
---------- |
---------- |
---------- |
||
|
(142.0) |
(157.2) |
(158.2) |
||
|
---------- |
---------- |
---------- |
||
|
Total liabilities |
(523.3) |
(526.1) |
(524.9) |
|
|
---------- |
---------- |
---------- |
||
|
Net assets |
259.0 |
249.7 |
254.6 |
|
|
====== |
====== |
====== |
||
|
EQUITY |
||||
|
Capital and reserves attributable to equity holders |
||||
|
Share capital |
14.9 |
14.9 |
14.9 |
|
|
Share premium account |
30.8 |
30.8 |
30.8 |
|
|
Merger reserve |
260.8 |
261.0 |
260.8 |
|
|
Share option reserve |
0.6 |
- |
0.2 |
|
|
Hedge reserve |
(0.8) |
- |
(1.6) |
|
|
Retained earnings |
(47.3) |
(57.0) |
(50.5) |
|
|
---------- |
---------- |
---------- |
||
|
Total equity attributable to equity holders |
9 |
259.0 |
249.7 |
254.6 |
|
====== |
====== |
====== |
Consolidated Cash Flow Statement
For the 24 weeks ended 12 September 2008
|
24 weeks ended 12 September 2008 |
24 weeks ended 14 September 2007 |
52 weeks ended 28 March 2008 |
|
|
Restated |
|||
|
£m |
£m |
£m |
|
|
Cash flows from operating activities |
|||
|
Profit before tax |
26.5 |
20.6 |
36.2 |
|
Depreciation |
6.7 |
7.7 |
16.2 |
|
Finance income |
(1.2) |
(3.4) |
(3.8) |
|
Finance expenses |
5.2 |
6.9 |
13.7 |
|
Profit on disposal of property, plant and equipment |
(0.7) |
- |
- |
|
Equity settled share based payments |
0.4 |
- |
- |
|
Increase in inventories |
(4.3) |
(0.5) |
(4.4) |
|
(Increase)/decrease in debtors |
(4.5) |
7.4 |
15.2 |
|
Increase in creditors |
14.5 |
11.6 |
1.1 |
|
Cash outflow relating to provisions |
(2.0) |
(1.4) |
(2.7) |
|
Contributions to pension scheme |
(5.5) |
- |
(9.7) |
|
---------- |
---------- |
---------- |
|
|
Net cash flow from operating activities |
35.1 |
48.9 |
61.8 |
|
Net interest paid |
(4.9) |
(5.5) |
(9.2) |
|
Tax paid |
- |
- |
- |
|
---------- |
---------- |
---------- |
|
|
Cash generated from operating activities |
30.2 |
43.4 |
52.6 |
|
---------- |
---------- |
---------- |
|
|
Cash flows from investing activities |
|||
|
Acquisition of property, plant and equipment |
(4.0) |
(2.0) |
(11.0) |
|
Disposal of property, plant and equipment |
0.9 |
- |
0.4 |
|
Acquisition of subsidiary, net of cash acquired |
- |
(11.0) |
(11.0) |
|
---------- |
---------- |
---------- |
|
|
Net cash outflow from investing activities |
(3.1) |
(13.0) |
(21.6) |
|
---------- |
---------- |
---------- |
|
|
Cash flows from financing activities |
|||
|
Payment of finance lease liabilities |
(0.5) |
- |
(0.6) |
|
Repayment of borrowings |
(16.1) |
(0.3) |
(0.4) |
|
Dividends paid |
(8.0) |
- |
- |
|
---------- |
---------- |
---------- |
|
|
Net cash outflow from financing activities |
(24.6) |
(0.3) |
(1.0) |
|
---------- |
---------- |
---------- |
|
|
Net increase in cash and cash equivalents |
2.5 |
30.1 |
30.0 |
|
Cash and cash equivalents at the start of the period |
41.0 |
11.0 |
11.0 |
|
---------- |
---------- |
---------- |
|
|
Cash and cash equivalents at the end of the period |
43.5 |
41.1 |
41.0 |
|
====== |
====== |
====== |
|
|
Cash and cash equivalents consist of: |
|||
|
Cash and cash equivalents (see note 10) |
43.5 |
41.1 |
41.0 |
|
====== |
====== |
====== |
Notes to the interim financial statements
|
1. Basis of preparation This interim financial information has been prepared applying the accounting policies and presentation that were applied in the preparation of the Group's published consolidated accounts for the period ended 28 March 2008. The preparation of these interim financial statements requires management to make judgements, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets and liabilities, income and expenses. Actual results may differ from these estimates. The significant judgements made by management in applying the Group's accounting policies and the key source of estimation uncertainty were the same as those that applied to the consolidated financial statements for the period ended 28 March 2008. The comparative figures for the period ended 28 March 2008 are not the statutory accounts for that financial year. Those accounts have been reported on by the auditors and delivered to the Registrar of Companies. The report of the auditors was unqualified and did not contain statements under section 237(2) or (3) of the Companies Act 1985. The balance sheet at 14 September 2007 and the results for the 24 weeks then ended have been restated for the impact of the adjustment recorded in the financial statements for the 52 weeks ended 28 March 2008 in respect of leases that contain minimum rental uplifts at predetermined rent review dates. The reported comparatives at 28 March 2008 and for the 52 weeks then ended remain unchanged. The restatement has resulted in a decrease in net assets reported at 14 September 2007 by £7.2m and a reduction in the reported profit for the 24 week period then ended of £0.5m. Further details are included in the published annual report and accounts for the 52 weeks ended 28 March 2008. |
|
2. Administrative expenses Included within Administrative expenses are property related profits of £1.1m (2007: nil). These profits arose from the sale of land, a premium received on exit of a lease and proceeds received from the grant of an option to assign a lease. |
|
3. Net financing costs |
24 weeks ended 12 September 2008 |
24 weeks ended 14 September 2007 |
52 weeks ended 28 March 2008 |
|
£m |
£m |
£m |
|
|
Finance income |
|||
|
Expected return on pension scheme assets |
(15.5) |
(17.3) |
(35.8) |
|
Interest on pension liabilities |
14.5 |
14.9 |
32.2 |
|
---------- |
---------- |
---------- |
|
|
Net credit on pension |
(1.0) |
(2.4) |
(3.6) |
|
Net gain on remeasurement of ineffective portion on interest rate swap to fair value |
(0.2) |
- |
(0.2) |
|
---------- |
---------- |
---------- |
|
|
(1.2) |
(2.4) |
(3.8) |
|
|
Finance expenses |
|||
|
Interest on bank loans and overdrafts |
3.2 |
3.9 |
9.4 |
|
Other interest payable |
- |
- |
0.1 |
|
Unwinding of discount on provisions |
1.2 |
1.1 |
2.5 |
|
Amortisation of financing costs |
0.8 |
0.8 |
1.7 |
|
Net loss on remeasurement of ineffective portion on interest rate swap to fair value |
- |
0.1 |
- |
|
---------- |
---------- |
---------- |
|
|
5.2 |
5.9 |
13.7 |
|
|
---------- |
---------- |
---------- |
|
|
4.0 |
3.5 |
9.9 |
|
|
====== |
====== |
====== |
|
4. Tax Tax on the profit before taxation for the 24 weeks ended 12 September 2008 is based on an effective rate of 17.0%, which has been calculated by reference to the projected charge for the full year. The rate for the 24 weeks ended 14 September 2007 and 52 weeks ended 28 March 2008 was 18.4% and 17.7% respectively. |
Notes to the interim financial statements (continued)
|
5. Share based payments During the period the Group announced a new Performance Share Plan (PSP) and Save As You Earn Scheme (SAYE). Awards under the PSP will vest over a three year period, subject to continued employment and certain share price targets being met. A quarter of the shares subject to each award will vest on reaching share prices of 28.75p, 30.5p, 34.5p and 46p over a consecutive 60 day period. The SAYE is an all employee scheme under which employees were offered the opportunity to save up to £250 per month over a 3 year period with a fixed purchase price of 18.68 pence per share. |
|
PSP |
SAYE |
|
|
Share awards granted |
36,001,500 |
24,684,774 |
|
Fair value per share at measurement date |
8.4p |
7.4p |
|
6. Earnings per share |
24 weeks ended 12 September 2008 |
24 weeks ended 14 September 2007 |
||||
|
Earnings |
Weighted average shares |
Earnings per share |
Earnings |
Weighted average shares |
Earnings per share |
|
|
Restated |
Restated |
|||||
|
£m |
Number m |
Pence |
£m |
Number m |
Pence |
|
|
Basic earnings |
22.0 |
1,488.4 |
1.48 |
16.8 |
1,432.8 |
1.17 |
|
Share options |
- |
4.5 |
(0.01) |
- |
3.6 |
- |
|
---------- |
---------- |
---------- |
---------- |
---------- |
---------- |
|
|
Diluted earnings |
22.0 |
1,492.9 |
1.47 |
16.8 |
1,436.4 |
1.17 |
|
====== |
====== |
====== |
====== |
====== |
====== |
|
|
52 weeks ended 28 March 2008 |
|||
|
Earnings |
Weighted average shares |
Earnings per share |
|
|
£m |
Number m |
Pence |
|
|
Basic earnings |
29.8 |
1,462.8 |
2.04 |
|
Share options |
- |
4.7 |
(0.01) |
|
---------- |
---------- |
---------- |
|
|
Diluted earnings |
29.8 |
1,467.5 |
2.03 |
|
====== |
====== |
====== |
|
At 12 September 2008, the new PSP scheme had not reached the first trigger point and hence has not been included in the dilution calculation.
7. Dividends
Amounts were recognised in the financial statements as distributions to equity shareholders in the following periods:
|
24 weeks ended 12 September 2008 |
24 weeks ended 14 September 2007 |
52 weeks ended 28 March 2008 |
|
|
£m |
£m |
£m |
|
|
Final dividend for the 52 weeks ended 28 March 2008 of 0.5375 pence (2007: nil) per share |
8.0 |
- |
- |
|
====== |
====== |
====== |
After the balance sheet date the Directors declared an interim dividend of 0.2p per share (£3m in total) payable on 28 November 2008 to equity holders on the register at the close of business on 31 October 2008. This dividend has not been provided for and therefore there is no difference between the dividends charged to reserves and dividends paid in the period.
Notes to the interim financial statements (continued)
|
8. Retirement benefit assets |
12 September 2008 |
14 September 2007 |
28 March 2008 |
|
£m |
£m |
£m |
|
|
Total market value of assets |
508.8 |
554.0 |
516.8 |
|
Present value of scheme liabilities |
(507.2) |
(546.9) |
(507.0) |
|
---------- |
---------- |
---------- |
|
|
Surplus in the scheme |
1.6 |
7.1 |
9.8 |
|
====== |
====== |
====== |
The assumptions adopted for the valuation at 12 September 2008 are the same as those adopted at 28 March 2008, other than 0.2% increases in the discount rate (to 6.6%), rate of salary increases (to 5.0%), pension increases (to 3.5%) and inflation (to 3.5%).
|
9. Reconciliation of movements in total equity |
24 weeks ended 12 September 2008 |
24 weeks ended 14 September 2007 |
52 weeks ended 28 March 2008 |
|
Restated |
|||
|
£m |
£m |
£m |
|
|
Total recognised income and expense for the period attributable to equity holders of the parent |
12.0 |
39.2 |
44.1 |
|
Dividends |
(8.0) |
- |
- |
|
Shares issued |
- |
14.1 |
14.1 |
|
Equity settled share based payments |
0.4 |
- |
- |
|
---------- |
---------- |
---------- |
|
|
Net increase in total equity |
4.4 |
53.3 |
58.2 |
|
Total equity as at beginning of the period |
254.6 |
196.4 |
196.4 |
|
---------- |
---------- |
---------- |
|
|
Total equity as at end of the period attributable to equity holders of the parent |
259.0 |
249.7 |
254.6 |
|
====== |
====== |
====== |
|
10. Analysis of net debt |
12 September 2008 |
14 September 2007 |
28 March 2008 |
|
£m |
£m |
£m |
|
|
Cash and cash equivalents |
43.5 |
41.1 |
41.0 |
|
Short term interest bearing loans and borrowings |
- |
(0.6) |
(0.3) |
|
Long term interest bearing loans and borrowings |
(72.4) |
(87.4) |
(87.9) |
|
---------- |
---------- |
---------- |
|
|
(28.9) |
(46.9) |
(47.2) |
|
|
====== |
====== |
====== |
Independent Review Report to Booker Group plc
Introduction
We have been engaged by the company to review the condensed set of financial statements in the half-yearly report for the 24 weeks ended 12 September 2008 which comprises the Consolidated Income Statement, the Consolidated Statement of Recognised Income and Expense, the Consolidated Balance Sheet, the Consolidated Cash Flow Statement and the related explanatory notes. We have read the other information contained in the half-yearly report and considered whether it contains any apparent misstatements or material inconsistencies with the information in the condensed set of financial statements.
This report is made solely to the company in accordance with the terms of our engagement. Our review has been undertaken so that we might state to the company those matters we are required to state to it in this report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company for our review work, for this report, or for the conclusions we have reached.
Directors' responsibilities
The half-yearly report is the responsibility of, and has been approved by, the directors. The directors are responsible for preparing the half-yearly report in accordance with the AIM Rules.
As disclosed in note 1, the annual financial statements of the group are prepared in accordance with IFRSs as adopted by the EU. The condensed set of financial statements included in this half-yearly report has been prepared in accordance with the recognition and measurement requirements of IFRSs as adopted by the EU.
Our responsibility
Our responsibility is to express to the company a conclusion on the condensed set of financial statements in the half-yearly report based on our review.
Scope of review
We conducted our review in accordance with International Standard on Review Engagements (UK and Ireland) 2410 Review of Interim Financial Information Performed by the Independent Auditor of the Entity issued by the Auditing Practices Board for use in the UK. A review of interim financial information consists of making enquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with International Standards on Auditing (UK and Ireland) and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.
Conclusion
Based on our review, nothing has come to our attention that causes us to believe that the condensed set of financial statements in the half-yearly report for the 24 weeks ended 12 September 2008 is not prepared, in all material respects, in accordance with the recognition and measurement requirements of IFRSs as adopted by the EU and the AIM Rules.
KPMG Audit Plc
Chartered Accountants
Manchester
Date: 8 October 2008
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