Preliminary Results

19 May 2011

Booker Group plc

Preliminary Results of Booker Group plc

for the 52 weeks ended 25 March 2011

This announcement contains the preliminary results of Booker Group plc ('Booker') for the 52 weeks ended 25 March 2011.

Financial Highlights

·; Total sales +6.2% to £3.6bn (2010: £3.4bn)

·; Like for like sales +5.1%:

- non tobacco +5.3% (2010: +6.9%)

- tobacco +4.9% (2010: +5.8%)

- sales to caterers +6.3% (2010: +9.1%)

- sales to retailers +4.6% (2010: +5.3%)

·; Operating profit up 15% to £76.5m

·; Profit before tax up 25% to £71.4m

·; Profit after tax up 24% to £59.1m

·; Basic earnings per share up 0.71 pence to 3.90 pence

·; Net cash of £27.1m (2010: £7.0m)

·; Proposed final dividend up 36% at 1.40 pence per share, making total dividend for the year of 1.67 pence per share, up 31%

Operational Highlights

·; Improved customer satisfaction

·; Customer numbers increased by 28,000 to 459,000

·; 24 business centres converted to 'Extra' format, taking total conversions to 115 of the 172 business centres in the UK

·; Internet sales +29% to £526m (2010: £407m)

·; Booker Direct is trading well

·; Ritter-Courivaud and Classic, the two businesses acquired in October 2010, are making a real contribution to the Group

·; Our Indian business continues to progress; our business centre in Mumbai is trading well and we are in the process of opening two further business centres

Outlook

The economy is expected to remain difficult in the year ahead and the food wholesale market remains very competitive. Nevertheless, we expect to continue to make progress in this challenging environment. The exceptional weather in the first seven weeks of the current financial year has led to a good start and Booker is on course to meet our expectations for the year.

Charles Wilson, Chief Executive of Booker, said:

"Booker made good progress in 2010/11 and our plan to 'Focus, Drive and Broaden' the business is on track. Customer satisfaction improved further, we served 28,000 more customers and grew sales by over £200m. Internet sales were £526m, Ritter and Classic have made a real contribution to the Group and we are pleased with the performance of Booker India. The UK economy looks challenging, but we are committed to helping our 459,000 customers prosper in the year ahead."

For further information contact:

Tulchan Communications (PR Adviser to Booker Group plc)

020 7353 4200

Susanna Voyle

Lucy Legh

A presentation for analysts will be held at 8.30am on Thursday 19 May 2011 at Investec's offices. For further details please call Sandra Cameron at Tulchan Communications on 020 7353 4200.

BUsiness prOFile

In the UK, Booker has 172 cash and carry business centres and a national delivery network which includes the Ritter-Courivaud and Classic Drinks businesses acquired in October 2010. Additionally we have a business centre in Mumbai, India.

* Includes approximately 7,000 customers of Booker India, 5,000 of Ritter-Courivaud and 3,000 of Classic

Of our sales, £2.2bn is non-tobacco and £1.4bn is tobacco.

£2.7bn of our sales are collected from the cash and carry business centres by the customer. £0.9bn is delivered to the customers' premises from the cash and carry business centres or national delivery network.

Substantial progress has been achieved.

Note:Operating profit in 2007 is stated before an exceptional charge of £1.8m.

chairman's Statement

I am pleased to report that Booker Group plc has delivered another strong performance. In the year to 25 March 2011 sales rose by 6.2% and operating profit was up 15% as customer satisfaction continued to improve. The financial performance was good and the Group ended the year with net cash of £27.1m. The drive into the catering market is working, with like-for-like sales to caterers up by 6.3% and sales to retailers up by 4.6%.

The plans to 'Broaden' the business are going well. We have converted 115 of our 172 business centres in the UK to the 'Extra' format - the lighter, brighter, more modern format. Booker distributed £930m of product to our customers' premises this year versus £797m last year and we continue to expand our delivered offering. Internet sales were £526m compared to £407m in the previous year and Booker India continues to trade well. I am pleased that Ritter-Courivaud and Classic, our two new acquisitions, have settled well into the Booker Group and are helping to broaden the business for the future.

After five years of great service to Booker, Bryan Drew has left the Board to pursue his entrepreneurial interests; I and the rest of the Board would like to thank him for his contribution to the Group. We are delighted that Guy Farrant has joined Booker as Managing Director of the UK Cash and Carry business. Guy brings a wealth of food industry expertise that will help to drive the business forward. Richard Farr, Non-Executive Director, stepped down from the Board on 18 May 2011. We thank him for the great support he has given to the company over the last two years. I am also pleased that Stewart Gilliland has joined as a Non-Executive Director. Stewart was formerly Chief Executive of Muller Dairies UK & Ireland and has great experience in the food and drinks trade. I should like to thank all our colleagues for their contribution to the success of the Group in the year just ended.

Basic earnings per share were 3.90 pence up from 3.19 pence last year. Given the strong operational performance of the business, the Board recommends the payment of a final dividend of 1.40 pence per share (2010: 1.03 pence per share) which, together with the interim dividend, makes a total dividend for the year of 1.67 pence per share (2010: 1.27 pence per share). The final dividend is payable on 8 July 2011 to shareholders on the register on 3 June 2011.

Outlook

The economy is expected to remain difficult in the year ahead and the food wholesale market remains very competitive. Nevertheless, we expect to continue to make progress in this challenging environment. The exceptional weather in the first seven weeks of the current financial year has led to a good start and Booker is on course to meet our expectations for the year.

Annual General Meeting

Our Annual General Meeting will be held on 6 July 2011. The notice of Annual General Meeting separately accompanies this document.

Richard Rose

Chairman

Chief Executive's Review

Booker made good progress in 2010/11 and our plan to 'Focus, Drive and Broaden' the business is on track. Bryn Satherley and his team continue to 'Focus' Booker. Guy Farrant has joined to 'Drive' the core cash & carry business and Mark Aylwin is 'Broadening' Booker into delivered wholesale. After five years Bryan Drew has moved on to pursue his entrepreneurial interests. We are very grateful for Bryan's contribution and I am pleased that the new team has settled in well.

FOCUS (commenced November 2005)

Through tight control of cash and costs, Booker seeks to 'Focus' on becoming the most efficient operator in our sector. Thanks to the hard work of many colleagues we have improved business efficiency and cash generation. We seek to 'stop, simplify and standardise' work, with most of the savings being invested in customer service. Through tight cash management we now have net cash of £27.1m.

DRIVE (commenced March 2006)

Booker serves 444,000 customers in the UK via the core cash and carry business. We continue to 'Drive' choice, price and service and each year we survey 40,000 customers to identify where improvements can be made. Customers say we have done a better job this year and our customer count has increased again, up by 13,000 customers.

Choice Up

·; Partly due to Guy Farrant's expertise in this area, our Fresh departments have significantly improved. Sales of fruit and vegetables are up 53%. We are confident that our Fresh business will continue to power ahead in the next few years.

·; In 2007 we launched Euro Shopper as an entry price brand for independent retailers. It now has sales of £56m at wholesale prices up from £44m last year. We have just launched a Euro Shopper Water, Sugar and Cola which are performing well.

·; Chef's Larder is our own label brand for caterers. Its sales were £156m, up 5% on prior year. During the year we improved Chef's Larder's credentials through the reformulation and repackaging of 30 lines. We will continue to drive Chef's Larder in the year ahead.

Prices Down

·; Ours is a very price competitive market. Booker surveys prices against our competition each week. During the year our price index remained competitive and this has been noticed by customers. We expect pricing to become even more important as the economy remains challenging and commodity prices become more volatile. During the year we 'rolled back' prices on 850 lines and expanded Euro Shopper and Booker Basics, our value brands. We expect to build on these actions in the year ahead.

Better Service

·; Stock availability was the best we have achieved in five years.

·; Our people are doing a brilliant job. In spite of the terrible weather at Christmas, our colleagues kept the business going.

·; I am pleased that 77% of eligible business centre colleagues achieved the customer satisfaction bonus last year.

Catering

·; Catering Sales grew by 6.3% to £1.1bn, because our choice, price and service for caterers made excellent progress. Our catering development sales force continues to serve our existing customers and to introduce new customers to Booker. During the year the catering customer count increased by 13,000.

Premier

·; Premier, Booker's symbol group, grew by 10%. The estate grew to 2,600 stores. The retail development team put a lot of work into compliance and building the sales and profits of existing Premier stores. This has worked and Premier was awarded Symbol Group of the Year 2010 at the Retail Industry Awards.

BROADEN (commenced April 2007)

In the UK, Booker seeks to offer the best choice, price and service to caterers and retailers and to become the suppliers' preferred route to market. We also 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:

Improving the cash and carry business centre experience

·; We have now converted 115 of our 172 business centres to the 'Extra' format. This features a lighter, brighter business centre environment and an improved choice, price and service. The conversion pays back in around a year and we plan to convert a further 20 business centres to 'Extra' in the year ahead.

Harnessing the Internet

·; Sales on booker.co.uk were £526m, up from £407m last year and £15m in 2005. All these sales are delivered to our customers' premises. The number of customers using the site has doubled in the last year as we improved online functionality for all our customers.

Booker Direct/Ritter-Courivaud/Classic

·; In 2007 Booker acquired Blueheath, a delivered wholesale business. Mark Aylwin (the former Chief Executive of Blueheath) and his team have successfully converted Blueheath into Booker Direct, winning some great customers including the prison service in England and Wales, supplying branded foods to Marks & Spencer and serving most of the UK's cinema chains. We seek to offer solutions for customers which they cannot obtain elsewhere and help our suppliers develop profitable routes to market. In October 2010 we improved our delivered wholesale capabilities with the acquisitions of Ritter-Courivaud and Classic.

·; Ritter-Courivaud is a leading speciality food supplier to restaurants. It has a fantastic food expertise and supplies many of the best restaurants in the UK. We have taken some of the Ritter range into Booker and are in the process of extending the Ritter national coverage through using Booker cash and carry business centre space. Ritter and Booker are starting to serve national accounts with a choice, price and service they cannot obtain from other suppliers.

·; Classic is an on-trade wholesaler supplying pubs and licensed customers mainly in the North West. We are taking some of the Classic range into Booker and have saved rental costs by moving some Classic warehouses into a neighbouring Booker business centre. We believe that in the next three years Classic/Booker can become a new force in the UK on-trade sector, offering a low risk, low cost, high service, local solution.

·; In the last year Booker Group delivered £930m of product to retailers and caterers in the UK. With the inclusion of Ritter-Courivaud we can become a major force in foodservice and with Classic we can become a significant player in on-trade.

Booker India

·; In September 2009 we opened our first business centre in Mumbai. We now have 7,000 customers and the customer reaction has been excellent. We have also launched 31 Happy Shopper symbol retailers which harness the lessons from Premier in the UK for the Kirana stores of Mumbai. We are in the process of opening our second business centre in Mumbai and our first joint venture business centre in Pune. Our partner in Pune is Satnam Arora, who has expertise which compliments our own. We look forward to developing the Booker offer into other cities to become the best choice, price and service supplier to Kirana stores and caterers.

Sustainability

·; We want to improve our carbon efficiency. In 2008 Booker was the first UK food wholesaler to be awarded the Carbon Trust Standard. Since then we have made good progress. We have recycled 4m litres of used cooking oil from our catering customers. This is used to power our distribution centre in Hatfield. We have sent 7% less to landfill, in spite of increasing sales by 6.2%, and we are now trialling recycling centres in thirteen business centres. Through better distribution fleet management we cut emissions of CO2 by 244 tonnes, new lighting systems saved 2,000 tonnes and with better waste management we saved 1,000 tonnes. We can see opportunities to help our customers reduce waste and become more carbon efficient.

·; We also look at sustainability in another way. Booker is privileged to serve 459,000 small and medium sized enterprises. Independent pubs, caterers, nursing homes, convenience shops and the other customers we serve are crucial to their local communities. If we can help our customers thrive, we can also contribute to sustaining communities and neighbourhoods in Britain and in India.

People

·; The progress at Booker has been achieved by our great team of people. During the terrible weather at Christmas numerous Booker people worked harder than ever to keep the business centres trading, the wagons running and the supplies moving. However, for the other 50 weeks of the year our people also did a heroic job. I am pleased that we continue to train all business centre colleagues under our PRIDE programme that boosts skills. For the fifth year running, the performance of the business means our people have enjoyed in our success through our bonus system. With this great team of people Booker will continue to make progress in the year ahead.

In summary, Booker made good progress in 2010/11 and our plan to Focus, Drive and Broaden the business is on track. Customer satisfaction improved further, we served 28,000 more customers and grew sales by over £200m. Internet sales were £526m, Ritter and Classic have made a real contribution to the Group and we are pleased with the performance of Booker India. The UK economy looks challenging, but we are committed to helping our 459,000 customers prosper in the year ahead.

Charles Wilson

Chief Executive

group finance director's report

Financial Review

Overall Group revenue increased by 6.2% (2010: +6.5%) to £3.6bn. Non tobacco like for like sales increased by 5.3% (2010: +6.9%) while like for like tobacco sales increased by 4.9% (2010: +5.8%).

Operating margin increased by 0.16 percentage points to 2.13% (2010: 1.97%) lifting group operating profit by £9.9m to £76.5m. The improvement in margin was due to a favourable product mix and control of costs.

The net finance cost of £5.1m (2010: £9.4m) comprised:

·; net cash interest cost of borrowing of £5.1m (2010: £6.8m)

·; the amortisation of fees and discounting of provisions of £4.0m (2010: £3.8m)

·; a credit relating to the expected return on pension scheme assets less amortisation of liabilities of £4.0m (2010: £1.2m)

Profit before tax rose £14.2m to £71.4m (2010: £57.2m), an increase of 25%.

The effective tax rate (being the tax charge as a percentage of profit before taxation) for the Group of 17.2% (2010: 16.8%) was below the standard rate of corporation tax in the UK, due principally to the utilisation of tax assets not recognised in prior years.

Profit after tax was £59.1m, an increase of £11.5m compared to 2010.

Basic earnings per share rose to 3.90p, up 22% from 3.19p in 2010.

The Board is recommending a final dividend of 1.40 pence per share (2010: 1.03 pence per share) payable (subject to shareholder approval at the Annual General Meeting, to be held on 6 July 2011) on 8 July 2011 to shareholders on the register at 3 June 2011. The shares will go ex-dividend on 1 June 2011.

The final dividend lifts the total dividend for the year to 1.67 pence per share, up 31% on 2010 (2010: 1.27 pence per share).

Acquisitions

On 13 October 2010 we acquired the entire issued share capital of Ritter-Courivaud Limited ('Ritter') and acquired the trading business and assets of Classic Drinks Limited ('Classic'). These acquisitions will support the continued development of Booker's delivered catering business.

Ritter is a speciality fine foods supplier to leading restaurants, hotels and contract caterers and was acquired for a total consideration of £14.5m comprising the issue of 29.2m new ordinary shares in Booker. Booker assumed £3.3m of net debt funded from Booker's existing resources. Ritter has current annual sales of approximately £30m.

Classic is a specialist on-trade wholesaler supplying wine, beer, spirits and non-alcoholic drinks to pubs, clubs and licensed premises and was acquired from Classic Drinks Limited, a subsidiary of Halewood International Limited, for a cash consideration of £3.7m, funded from Booker's existing resources. Classic operates from eight depots in the Midlands and the North of England and has current annual sales of approximately £30m.

Cash Flow

Management has continued to focus on cash generation resulting in a net improvement of £20.1m in the year to close with a net cash position of £27.1m at 25 March 2011. Earnings before interest, tax, depreciation and amortisation ('EBITDA') of £89.2m, up from £80.6m in the prior year, funded capital expenditure of £11.9m (2010: £15.5m), acquisitions of £7.5m and the payment of £19.5m of dividends (2010: £13.6m).

Pensions

The Booker Pension Scheme ('the Scheme') is a defined benefit scheme that was closed to new members in October 2001, and was closed to future accruals for existing members in August 2002. At 25 March 2011, the Scheme had an IAS 19 deficit of £8.0m (2010: £21.8m), comprising Scheme assets of £541.8m and estimated liabilities of £549.8m.

The Group contributed £11.0m (2010: £11.6m) in the year of which £1.0m (2010: £1.6m) was in relation to the costs of administering the Scheme.

During the year the 2010 Triennial valuation was agreed with the pension fund Trustees. A Scheme Funding deficit of £67.6m at 31 March 2010 will be recovered through company contributions at the rate of £9.6m per annum from April 2011 to October 2016.

Goodwill

The net book value of goodwill on the balance sheet is £436.4m (2010: £423.9m). The goodwill carrying value is more than supported by expected future cash flows discounted back to present day values at a pre-tax discount rate of 11.2% (2010: 11.2%).

Capital Structure

The Group finances its operations through a combination of bank borrowings, leases and retained profits and its capital base is structured to meet the ongoing requirements of the business. As at 25 March 2011, the Group had net cash of £27.1m (2010: £7.0m).

Borrowing Facilities

The Group is required to repay half of cash generated in the prior year against its bank loan, a payment expected to be made in July following the year end. The Group's banks agreed to waive this requirement for the year ended 25 March 2011 because £20.0m of the outstanding loan was repaid on 24 March 2011. Consequently on 24 March 2011 the bank loan reduced to £20.0m (2010: £40.0m).

In addition to the bank loan, the Group had in place at 25 March 2011 a £136.0m revolving credit facility, which included a £22.9m guarantee facility. By 28 April 2011, bank guarantees of £15.0m had been released and the revolving credit facility was reduced accordingly. Consequently from 28 April 2011 the revolving credit facility was £121.0m, which includes a £7.9m guarantee facility.

The bank loan and revolving credit facility are secured against the assets of the Group. There are cross guarantees between all Group companies (other than dormant subsidiaries). All facilities are available until June 2012. We are currently engaged in discussions with banking institutions regarding a refinancing of the Group's facilities.

The Group's borrowings are subject to covenants set by the lenders using financial results prepared under UK GAAP. 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 Interest Cover, measured by the ratio of EBITDA to interest (tested quarterly), and Cash Cover, measured by the ratio of cash inflow to interest (tested half yearly).

The Group complied with its covenants throughout the year. At 25 March 2011, under UK GAAP, the Group achieved Interest Cover of 18.6 and Cash Cover of 5.3, comfortably exceeding its covenant obligations. The Group must have also not required its revolving credit facility for a total of ten working days within the financial year, a target that was also exceeded.

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

The bank loan and funds drawn on the revolving credit facility bear floating interest rates linked to LIBOR plus a margin of 2.0% to 2.6%.

The Group's hedging policy in the course of the financial year was to maintain the profile of its £40.0m of borrowings at a fixed interest rate of 4.98% to 24 March 2011, at which date the £40.0m interest swap expired. Following the repayment of £20.0m of the outstanding loan on 24 March 2011 the Group has chosen not to hedge its remaining £20.0m of borrowings.

In the year the net cash interest cost of borrowing of £5.1m (2010: £6.8m) has reduced as core borrowings were lower than in the year ended 26 March 2010 and ineffective hedge costs, incurred in the prior year, have been avoided.

Liquidity

At 25 March 2011, £46.2m was held in cash and cash equivalents. The Group's borrowings related to its £20.0m bank loan and £0.4m of finance leases.

At 25 March 2011, the Group had in issue £19.3m of guarantees (2010: £30.7m) leaving undrawn facilities of £116.7m.

The peak level of drawdown on the revolving credit facility on a cleared basis in the year to 25 March 2011 was £47.6m giving a minimum facility headroom in the year of £65.5m after taking into account the guarantees referred to above.

Risk Management

The Board is continually reviewing the risks to people, profits, assets, reputation and funding that the business faces. The year ended 25 March 2011 was challenging with the continued impact of the 'credit crisis', the poor weather in December and periods of commodity price uncertainty. Despite these and other challenges the Group's risk management controls operated well.

Jonathan Prentis

Group Finance Director

Consolidated Income Statement

For the 52 weeks ended 25 March 2011

Consolidated Statement of Comprehensive Income

For the 52 weeks ended 25 March 2011

Consolidated Balance Sheet

As at 25 March 2011

Consolidated Cash Flow Statement

For the 52 weeks ended 25 March 2011

Consolidated Statement of Changes in Equity

52 weeks ended 25 March 2011

52 weeks ended 26 March 2010

Notes to the Preliminary Results

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.

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 2011 or 26 March 2010 but is derived from those accounts. Statutory accounts for 2010 have been delivered to the registrar of companies, and those for 2011 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.

Basis of accounting

In accordance with EU law (IAS Regulation EC 1606/2002), the preliminary results have been prepared in accordance with International Financial Reporting Standards ('IFRS') adopted for use in the EU as at 25 March 2011 ('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').

Accounting standards adopted in the period

IFRS 3 (revised) "Business combinations" is effective prospectively to business combinations for which the acquisition date is on or after the beginning of the first annual reporting date beginning on or after 1 July 2009. During the period, the Group made two acquisitions, and the requirements of these standards has been applied in accounting for these transactions.

There have been no further alterations made to the accounting policies as a result of considering all amendments to IFRS and IFRIC interpretations that became effective during the financial period as these were considered to be immaterial to the Group's operations or were not relevant.

Basic earnings per share are calculated by dividing the profit after tax by the weighted average number of ordinary shares outstanding during the period.

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 IAS 33 "Earnings per share".

5. Dividends

The Directors are proposing a final dividend of 1.40 pence per share (2010: 1.03 pence per share), which will absorb £21.5m of equity (distributable reserves). Subject to shareholder approval at the AGM, to be held on 6 July 2011, the dividend will be paid on 8 July 2011 to shareholders on the register at 3 June 2011. The shares will go ex-dividend on 1 June 2011.

6. Analysis of net cash

Cash and cash equivalents comprise cash held by the Group and short-term bank deposits with an original maturity of three months or less. The carrying amount of these assets approximates their fair value.

Responsibility statement of the Directors in respect of the Annual Report and Accounts

We confirm that to the best of our knowledge:

·; the 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 taken as a whole; and

·; the directors' report includes a fair review 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.

By order of the Board

Charles Wilson Jonathan Prentis

Director Director

18 May 2011