30th Oct 2007 07:12
Booker Group PLC30 October 2007 Booker Group plc Interim results of Booker Group plc ended 14 September 2007 This announcement contains the interim results of Booker Group plc ("Booker")for the 24 weeks ended 14 September 2007. The results include 12 weeks tradingof Blueheath Holdings plc ("Blueheath") which was acquired via a reversetakeover on 4 June 2007. Financial Highlights • Total sales £1.5 billion, +2.5% (including 12 weeks of Blueheath) • Like-for-like sales*:- - non-tobacco +3.5% (vs -3.0% last year) - tobacco -3.9% (vs -1.8% last year) - total +0.4% (vs -2.5% last year) • Operating profit up to £24.7m from £19.6m (+26.0%) • Profit before tax of £21.2m versus £15.5m last year (+36.8%) • Net debt reduced to £46.9m from £69.6m last year Operating Highlights • The integration with Blueheath is on track • Conversion of a further 12 branches into 'Extra' format (which have broader range and better service) taking the total number of 'Extra' branches to 20 • Continuing to drive sales through 'choice up, prices down and better service' • Launched improved booker.co.uk website; excellent customer response Outlook Group turnover in the first period of the second half is ahead of the sameperiod 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, "In the past six months the weather has been unfavourable and smoking has beenbanned in public places. Despite these challenges Booker Group plc is continuingto make good progress and the integration with Blueheath is on track." * Like-for-like sales includes Booker 'Extra' converted branches but excludesBlueheath turnover For further information contact: Tulchan Communications (PR Adviser to Booker Group plc)020 7353 4200Susanna VoyleCelia Gordon Shute Investec Bank UK (Nominated Adviser to Booker Group plc)020 7597 5970Keith Anderson A conference call for analysts will be held at 08.30am on Tuesday 30th October2007. For dial-in details please call Tulchan Communications on 0207 353 4200. Chairman's Statement I'm delighted to report on a good performance for the half year to 14thSeptember 2007. Sales for the 24 week period were £1.5 billion, (£1.4 billion 2006), an increaseof 2.5%. Half year profits were £21.2 million (£15.5 million 2006), up 37%. Netdebt reduced by 33% to £46.9 million (£69.6 million 2006). Booker is continuing to 'drive' sales by offering 'choice up, prices down andbetter service'. Despite the challenges of unfavourable weather and the smokingban, our like-for-like non-tobacco sales showed an increase of 3.5%. The driveinto the catering market is working with sales to caterers having increased by3.2%. Sales to retailers declined by 0.8% due primarily to the smoking ban.Premier, our retail symbol group continued to grow and now has 2,085 outlets.During the period we launched 'Euroshopper' a range of 31 lines which offeroutstanding value and sales are now running at an average of approximately £250kper week. Our prices overall have remained competitive and stock availabilityhas been good. Significant progress has been made in reducing net debt to £46.9 million at theend of the period compared to £69.6 million at the same time last year. This hasbeen achieved through a combination of strong operating cashflow and theefficient management of working capital. Although no interim dividend isproposed, the Board will consider declaring a full year dividend once theoutcome for the year is known. The plans to 'broaden' the business are going well. We converted a further 12branches to the 'Extra' format during the period. We now have 20 'Extras' whichoffer a broader range and better environment for customers. The sales of theconverted branches recorded a sales uplift on the prior year of 3.9%, comparedto a company like-for-like increase of +0.4%. We expect to achieve payback onthe conversion costs in less than a year. We launched the improved booker.co.uk website in July to take account ofincreasing customer demand for this sales channel. Internet sales in the halfwere £33.9m, up over 100% versus last year. The integration with Blueheath is on track. The cash and cost benefits are beingdelivered in line with plan and we have taken steps to facilitate the futureexpansion of the delivered wholesale business. Booker's strategy to drive and broaden its business is working and in achallenging environment we continue to make good progress. Outlook Group turnover in the first period of the second half is ahead of the sameperiod 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 representmanagement's best judgement as to what may occur in the future. However, thegroup's actual results for the current and future fiscal periods and corporatedevelopments 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 causethe group's actual results for future periods to differ materially from thoseexpressed in any forward looking statements made in this document. Consolidated Income Statement For the 24 weeks ended 14 September 2007 24 weeks ended 24 weeks ended 52 weeks ended Note 14 September 2007 15 September 2006 30 March 2007 £m £m £m Revenue 1,465.4 1,430.3 3,009.8Cost of sales (1,420.4) (1,393.7) (2,926.5) ---------- ---------- ----------Gross profit 45.0 36.6 83.3 Administrative expenses- normal (20.3) (16.2) (46.0)- exceptional items 2 - (0.8) (1.8) --------- --------- ---------Total administrative (20.3) (17.0) (47.8)expenses --------- --------- --------- Operating profit 24.7 19.6 35.5 Finance income 3 3.4 4.9 10.7Finance expenses 3 (6.9) (9.0) (17.9) ---------- ---------- ----------Net financing costs (3.5) (4.1) (7.2) Profit before tax 21.2 15.5 28.3 Income tax 4 (3.9) (4.1) (15.8) ---------- ---------- ----------Profit for the periodattributable to equityholders of the parent 17.3 11.4 12.5 ====== ====== ====== Basic earnings per share 5 1.21p 0.85p 0.93p(Pence) ====== ====== ======Diluted earnings per 5 1.20p 0.85p 0.93pshare (Pence) ====== ====== ====== Consolidated Statement of Recognised Income and Expense For the 24 weeks ended 14 September 2007 24 weeks ended 24 weeks ended 52 weeks ended 14 September 2007 15 September 2006 30 March 2007 £m £m £m Actuarial gain/(loss) on 32.0 (5.2) 31.4defined benefit plans(March 2007: the actuarialgain is shown net of £12.1mof payments to deferredmembers) Tax recognised on income andexpenses recognised directlyin equity (9.6) 1.6 (13.0) ---------- ---------- ----------Net income/(expenses) 22.4 (3.6) 18.4recognised directly inequity Profit for the period 17.3 11.4 12.5 ---------- ---------- ----------Total recognised income andexpense for the periodattributable to equity 39.7 7.8 30.9holders of the parent ====== ====== ====== Consolidated Balance Sheet As at 14 September 2007 Note 14 September 2007 15 September 2006 30 March 2007 £m £m £mASSETSNon-current assetsProperty, plant and 60.2 68.7 65.1equipmentIntangible assets 6 423.2 410.1 410.1Retirement benefit 7 7.1 - -assetsDeferred tax asset 7 - 28.1 10.8 ---------- ---------- ---------- 490.5 506.9 486.0Current assetsInventories 181.2 169.4 176.2Trade and other 62.4 60.5 55.0receivablesCash and cash 9 41.1 17.5 29.9equivalentsOther financial assets 0.6 - 0.7 ---------- ---------- ---------- 285.3 247.4 261.8 ---------- ---------- ----------Total assets 775.8 754.3 747.8 ---------- ---------- ----------LIABILITIESCurrent liabilitiesBank overdraft 9 - - (18.9)Other interest bearing 9 (0.6) (1.1) (0.6)loans and borrowingsTrade and other (357.0) (340.0) (338.9)payablesIncome tax liabilities (11.3) (2.4) (11.3) ---------- ---------- ---------- (368.9) (343.5) (369.7)Non-currentliabilitiesOther interest bearing 9 (87.4) (86.0) (86.9)loans and borrowingsOther payables (17.8) (19.5) (18.4)Retirement benefit 7 - (80.8) (27.3)liabilitiesProvisions (42.1) (43.0) (42.4)Other financial - (1.5) -liabilitiesDeferred tax liability 7 (2.7) - - ---------- ---------- ---------- (150.0) (230.8) (175.0) ---------- ---------- ----------Total liabilities (518.9) (574.3) (544.7) ---------- ---------- ---------- Net assets 256.9 180.0 203.1 ====== ====== ======EQUITYCapital and reservesattributable to equityholdersShare capital 8 14.9 275.9 275.9Share premium account 8 30.8 16.7 16.7Merger reserve 8 261.0 - -Retained earnings 8 (49.8) (112.6) (89.5) ---------- ---------- ----------Total equity 256.9 180.0 203.1attributable to equityholders ====== ====== ====== Consolidated Cash Flow Statement For the 24 weeks ended 14 September 2007 24 weeks ended 24 weeks ended 52 weeks ended 14 September 2007 15 September 2006 30 March 2007 £m £m £mCash flows from operatingactivitiesProfit for the period 17.3 11.4 12.5Depreciation 7.7 8.1 17.4Finance income (3.4) (4.9) (10.7)Finance expenses 6.9 9.0 17.9Income tax expense 3.9 4.1 15.8Increase in inventories (0.5) (1.3) (8.1)Decrease in debtors 7.4 2.5 8.0Increase in creditors 11.0 42.0 25.1Cash outflow relating to (1.4) (1.7) (3.5)provisionsMovement in pension liability - (6.2) (8.3) ---------- ---------- ----------Net cash flow from operating 48.9 63.0 66.1activitiesNet interest paid (5.5) (3.9) (7.5)Income tax paid - - (0.1) ---------- ---------- ----------Cash generated from operating 43.4 59.1 58.5activities ---------- ---------- ----------Cash flows from investingactivitiesAcquisition of property, (2.0) (1.1) (6.0)plant and equipmentAcquisition of subsidiary, (11.0) - -net of cash acquired ---------- ---------- ----------Net cash outflow from (13.0) (1.1) (6.0)investing activities ---------- ---------- ----------Cash flows from financingactivitiesPayment of finance lease - - (0.4)liabilitiesRepayment of borrowings (0.3) (72.9) (73.5) ---------- ---------- ----------Net cash outflow from (0.3) (72.9) (73.9)financing activities ---------- ---------- ---------- Net increase/(decrease) in 30.1 (14.9) (21.4)cash and cash equivalents Cash and cash equivalents at 11.0 32.4 32.4the start of the period ---------- ---------- ----------Cash and cash equivalents at 41.1 17.5 11.0the end of the period ====== ====== ====== Cash and cash equivalentsconsist of:Cash and cash equivalents 41.1 17.5 29.9Bank overdrafts - - (18.9) ---------- ---------- ---------- 41.1 17.5 11.0 ====== ====== ====== Notes to the interim financial statements 1. Basis of preparation The consolidated interim financial statements of the Group for the 24 weeks ended 14 September 2007 comprise the company and its subsidiaries (together referred to as the 'Group'). On 4 June 2007 the Company, then named Blueheath Holdings plc, became the legal parent company of Giant Topco Limited (parent company of Booker Limited) in a share-for-share transaction. Due to the relative values of the companies, the former Giant Topco Limited shareholders became the majority shareholders with 90.36% of the enlarged share capital. Following the transaction the Company's continuing operations and executive management were predominantly those of Giant Topco Limited. Accordingly, the substance of the combination was that Giant Topco Limited acquired Blueheath Holdings plc in a reverse acquisition. As part of the business combination Blueheath Holdings plc changed its name to Booker Group plc and changed its accounting reference date to March. The Companies Act 1985 and IFRS3 would normally require the Company's consolidated accounts to follow the legal form of the business combination. In that case, the pre-acquisition results would be those of Blueheath Holdings plc and its subsidiary undertakings, which would exclude Giant Topco Limited. The results of Giant Topco Limited would then be included in the Group from 4 June 2007. However, this would portray the combination as an acquisition of Giant Topco Limited by Blueheath Holdings plc and would, in the opinion of the Directors, fail to give a true and fair view of the substance of the business combination. Accordingly, the Directors have adopted reverse acquisition accounting as the basis of consolidation which is also endorsed under IFRS3 'Business Combinations'. As a consequence of applying reverse acquisition accounting, the results of the Group at 14 September 2007 comprise the results of Giant Topco Limited for the 24 weeks ended 14 September 2007 and those of Blueheath Holdings plc from 4 June 2007. The comparative figures for the Group are those of Giant Topco Limited for the 24 weeks ended 15 September 2006 and for the 52 weeks to 30 March 2007. The AIM Rules require that the next annual consolidated accounts of the Group for the period ending 28 March 2008 be prepared in accordance with International Financial Reporting Standards ('IFRS') as adopted by the European Union ("adopted IFRSs"). The comparative figures for the period ended 30 March 2007 are not the statutory accounts for that financial year. Those accounts, which were prepared under UK Generally Accepted Accounting practice ('UK GAAP'), 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. This interim financial information has been prepared on the basis of the recognition and measurement requirements of adopted IFRSs as at 14 September 2007 that are effective (or available for early adoption) at 28 March 2008, the Group's first annual reporting date at which it is required to use adopted IFRSs. Based on these adopted IFRSs, the directors have applied the accounting policies, as set out in the Group's IFRS restatement report, which they expect to apply when the first annual IFRS financial statements are prepared for the period ending 28 March 2008. However, the adopted IFRSs that will be effective (or available for early adoption) in the annual financial statements for the period ending 28 March 2008 are still subject to change and to additional interpretations and therefore cannot be determined with certainty. Accordingly, the accounting policies for that annual period will be determined finally only when the annual financial statements are prepared for the period ending 28 March 2008. The accounting policies have been applied consistently for all periods throughout the Group for the purpose of these consolidated interim financial statements. 2. Exceptional items 24 weeks ended 24 weeks ended 52 weeks ended 14 September 2007 15 September 2006 30 March 2007 £m £m £m Business restructuring - (0.8) (0.6)costsProfessional fees in - - (1.2)respect of pensions ---------- ---------- ---------- - (0.8) (1.8) ====== ====== ====== Business restructuring costs relate to redundancy costs. During the prior year the Group undertook two exercises with the objective ofreducing the risk in relation to it's defined benefit pension scheme, andincurred £1.2m of professional fees as a consequence. Notes to the interim financial statements (continued) 3. Net financing costs 24 weeks ended 24 weeks ended 52 weeks ended 14 September 2007 15 September 2006 30 March 2007 £m £m £mFinance incomeExpected return on pension scheme 17.3 20.2 40.2assetsInterest on pension liabilities (14.9) (17.4) (34.7) ---------- ---------- ----------Net credit on pension 2.4 2.8 5.5 Interest receivable and similar income 1.0 0.7 1.6Net gain on remeasurement of interestrate swap to fair value - 1.4 3.6 ---------- ---------- ---------- 3.4 4.9 10.7Finance expensesInterest on bank loans and overdrafts (4.9) (6.7) (12.6)Other interest payable - (0.1) (0.4)Unwinding of discount on provisions (1.1) (1.3) (2.6)Amortisation of financing costs (0.8) (0.9) (2.3)Net loss on remeasurement of interestrate swap to fair value (0.1) - - ---------- ---------- ---------- (6.9) (9.0) (17.9) ---------- ---------- ---------- (3.5) (4.1) (7.2) ====== ====== ====== 4. Income tax Income tax on the profit before taxation for the 24 weeks ended 14 September 2007 is based on an effective rate of 18.4%, which has been calculated by reference to the projected charge for the full year. 5. Earnings per share 24 weeks ended 14 September 2007 24 weeks ended 15 September 2006 Weighted average shares Weighted average shares Earnings Earnings Earnings per share Earnings per share £m Number m Pence £m Number m Pence Basic 17.3 1,432.8 1.21 11.4 1,343.8 0.85earningsShare - 3.6 (0.01) - - -options ---------- ---------- ---------- ---------- ---------- ----------Diluted 17.3 1,436.4 1.20 11.4 1,343.8 0.85earnings ====== ====== ====== ====== ====== ====== 52 weeks ended 30 March 2007 Weighted average shares Earnings per share Earnings £m Number m Pence Basic earnings 12.5 1,344.3 0.93Share options - - - ---------- ---------- ----------Basic and diluted 12.5 1,344.3 0.93earnings ====== ====== ====== The weighted average number of shares assumes that the 1,344,910,958 ordinary shares issued in relation to the acquisition of Giant Topco Limited on 4 June 2007 by Booker Group plc (formerly Blueheath Holdings plc) existed on this date. As detailed in the basis of preparation note, this transaction has been accounted for as a reverse acquisition. To enable a meaningful comparison, the shares issued on 4 June 2007, adjusted in proportion to any shares issued by Giant Topco Limited prior to this date, have been assumed to be in existence for calculating the weighted average number of shares. Booker Group plc shares and share options have been included since 4 June 2007. Notes to the interim financial statements (continued) 6. Acquisition of subsidiary Acquiree's Fair value Accounting Acquisition book values adjustments policy amounts £m £m £m £m Investments - 1.9 - 1.9Property, plant and equipment 0.8 - - 0.8Stocks 4.5 - - 4.5Trade and other receivables 15.8 (0.5) (0.6) 14.7Interest-bearing loans and borrowings (4.4) - - (4.4)Trade and other payables (7.9) (1.9) (0.2) (10.0) ---------- ---------- ---------- ----------Net identifiable assets and 8.8 (0.5) (0.8) 7.5liabilities ====== ====== ====== Fair value of consideration paid,including transaction and advisercosts of £6.6m 20.6 ----------Goodwill on acquisition 13.1 ======Intangible assets - GoodwillAt start of period 410.1Addition 13.1 ----------At end of period 423.2 ====== 7. Retirement benefit assets/(liabilities) 14 September 2007 15 September 2006 30 March 2007 £m £m £m Total market value of 554.0 617.4 619.8 assets Present value of scheme (546.9) (698.2) (647.1) liabilities ---------- ---------- ---------- Surplus/(deficit) in the 7.1 (80.8) (27.3) scheme Related deferred tax (2.7) 28.1 10.8 (liability)/asset ---------- ---------- ---------- Net pension asset/ 4.4 (52.7) (16.5) (liability) ====== ====== ====== 8. Share capital and reserves Share Premium Merger Reserve Retained earnings Share Capital Total £m £m £m £m £m At start of period 275.9 16.7 - (89.5) 203.1Reverse acquisition (261.0) 14.1 261.0 - 14.1capital adjustmentTotal recognised income - - - 39.7 39.7and expense ---------- ---------- ---------- ---------- ----------At end of period 14.9 30.8 261.0 (49.8) 256.9 ====== ====== ====== ====== ====== 9. Net debt 14 September 2007 15 September 2006 30 March 2007 £m £m £m Cash and cash equivalents 41.1 17.5 29.9Bank overdraft - - (18.9)Short term interest bearing (0.6) (1.1) (0.6)loans and borrowingsLong term interest bearing loans (87.4) (86.0) (86.9)and borrowings ---------- ---------- ---------- (46.9) (69.6) (76.5) ====== ====== ====== Independent Review Report to Booker Group plc Introduction We have been engaged by the company to review the condensed set of financialstatements in the half-yearly report for the 24 weeks ended 14 September 2007which comprises the Consolidated Income Statement, the Consolidated Statement ofRecognised Income and Expense, the Consolidated Balance Sheet, the ConsolidatedCash Flow Statement and the related explanatory notes. We have read the otherinformation contained in the half-yearly report and considered whether itcontains any apparent misstatements or material inconsistencies with theinformation in the condensed set of financial statements. This report is made solely to the company in accordance with the terms of ourengagement. Our review has been undertaken so that we might state to the companythose matters we are required to state to it in this report and for no otherpurpose. To the fullest extent permitted by law, we do not accept or assumeresponsibility to anyone other than the company for our review work, for thisreport, or for the conclusions we have reached. Directors' responsibilities The half-yearly report is the responsibility of, and has been approved by, thedirectors. The directors are responsible for preparing the half-yearly report inaccordance with the AIM Rules. As disclosed in note 1, the next annual financial statements of the group willbe prepared in accordance with IFRSs as adopted by the EU. The accounting policies that have been adopted in preparing the condensed set offinancial statements are consistent with those that the directors currentlyintend to use in the next annual financial statements. There is, however, apossibility that the directors may determine that some changes to these policiesare necessary when preparing the full annual financial statements for the firsttime in accordance with IFRSs as adopted by the EU. Our responsibility Our responsibility is to express to the company a conclusion on the condensedset 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 ReviewEngagements (UK and Ireland) 2410 Review of Interim Financial InformationPerformed by the Independent Auditor of the Entity issued by the AuditingPractices Board for use in the UK. A review of interim financial informationconsists of making enquiries, primarily of persons responsible for financial andaccounting matters, and applying analytical and other review procedures. Areview is substantially less in scope than an audit conducted in accordance withInternational Standards on Auditing (UK and Ireland) and consequently does notenable us to obtain assurance that we would become aware of all significantmatters that might be identified in an audit. Accordingly, we do not express anaudit opinion. Conclusion Based on our review, nothing has come to our attention that causes us to believethat the condensed set of financial statements in the half-yearly report for the24 weeks ended 14 September 2007 is not prepared, in all material respects, inaccordance with the recognition and measurement requirements of IFRSs as adoptedby the EU and the AIM Rules. KPMG Audit Plc Chartered Accountants Manchester Date: This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
Booker Group