Preliminary Results

24 May 2012

Booker Group plc

Preliminary Results of Booker Group plc

for the 53 weeks ended 30 March 2012

This announcement contains the preliminary results of Booker Group plc ('Booker'), the UK's leading food wholesaler, for the 53 weeks ended 30 March 2012.

Financial Highlights

·; Total sales for 53 weeks +9.4% to £3.9bn (2011: £3.6bn) (52 weeks: +7.3%)

·; Like for like sales +6.1% (52 weeks)

- non tobacco +5.1% (2011: +5.3%)

- tobacco +7.8% (2011: +4.9%)

- sales to caterers +6.1% (2011: +6.3%)

- sales to retailers +6.1% (2011: +4.6%)

·; Operating profit up 17% to £89.6m (52 weeks: up 16% to £88.6m)

·; Profit before tax up 27% to £90.8m (52 weeks: up 26% to £89.7m)

·; Profit after tax up 27% to £74.9m (52 weeks: up 25% to £74.0m)

·; Basic earnings per share up 0.93 pence to 4.83 pence

·; Net cash of £63.4m (2011: £27.1m)

·; Proposed final dividend up 39% at 1.95 pence per share, making total dividend for the year of 2.28 pence per share, up 37%

Operational Highlights

·; Improved customer satisfaction

·; Customer numbers increased by 22,000 to 481,000

·; 27 business centres converted to 'Extra' format, taking total conversions to 142 of the 172 business centres in the UK

·; Internet sales up 21% (52 weeks) to £635m (2011: £526m)

·; Booker Direct is performing well and the creation of "Chef Direct" to serve major foodservice customers remains on track

·; Our Indian business continues to progress; our business centres in Mumbai and Pune are trading well

Outlook

The economy is expected to remain challenging in the year ahead and the food wholesale market remains very competitive. Nevertheless, we expect to continue to make progress in this difficult environment. Booker has made a good start to the current financial year, even compared to the very strong performance in the first seven weeks of last year and, in spite of the fact that tobacco sales have been slow, we remain on course to meet our expectations for the year.

Charles Wilson, Chief Executive of Booker, said:

"Booker made further good progress in 2011/12. Our plan to Focus, Drive and Broaden the business remains on track. Customer satisfaction improved again, helping us to service 22,000 more customers and grow sales by more than £260m. Internet sales grew 21% to £635m, Booker Direct continues to trade well and we are pleased with the performance of Booker India. We remain committed to helping our growing customer base to 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 08.30am on Thursday 24 May 2012 at Investec's offices.

For further details please contact Sandra Cameron at Tulchan Communications on 020 7353 4200 or [email protected]

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.

* Includes approximately 10,000 customers of Booker India, 3,000 of Ritter-Courivaud and 3,000 of Classic

Of our sales, £2.4bn is non-tobacco and £1.5bn is tobacco.

£2.8bn of our sales are collected from the cash and carry by the customer. £1.1bn is delivered to the customers' premises.

Substantial progress has been achieved.

Note: 2012 is a 53 week statutory reporting period

chairman's Statement

I am pleased to report that Booker Group plc has delivered another good performance. In the 52 weeks to 23 March 2012 sales rose by 7.3% and operating profit was up 16% as customer satisfaction continued to improve. The financial performance was good and the Group ended the year (53 weeks to 30 March 2012) with net cash of £63.4m. The drive into the catering market is working, with like-for-like sales to caterers up by 6.1%; sales to retailers also rose by 6.1%.

The plans to 'Broaden' the business are going well. We have converted 142 of our 172 business centres in the UK to the 'Extra' format - the lighter, brighter, more modern format. In the 52 weeks Booker distributed £1,053m of product to our customers' premises versus £930m last year and we continue to expand our delivered offering with the launch of Chef Direct, which will serve major foodservice customers. Internet sales were £635m compared to £526m in the previous year and Booker India is making good progress.

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 4.83 pence up from 3.90 pence last year. Given the strong operational performance and cash flow of the business the Board recommends the payment of a final dividend of 1.95 pence per share (2011: 1.40 pence per share) which, together with the interim dividend, makes a total dividend for the year of 2.28 pence per share (2011: 1.67 pence per share). The final dividend is payable on 20 July 2012 to shareholders on the register on 8 June 2012.

Outlook

The economy is expected to remain challenging in the year ahead and the food wholesale market remains very competitive. Nevertheless, we expect to continue to make progress in this difficult environment. Booker has made a good start to the current financial year, even compared to the very strong performance in the first seven weeks of last year and, in spite of the fact that tobacco sales have been slow, we remain on course to meet our expectations for the year.

Annual General Meeting

Our Annual General Meeting will be held on 18 July 2012. The notice of Annual General Meeting separately accompanies this document.

Richard Rose

Chairman

Chief Executive's Review

Our plan to 'Focus, Drive and Broaden' Booker is on track.

FOCUS (commenced November 2005)

Booker seeks to become the most efficient operator in our sector. Bryn Satherley and his team continue to improve business efficiency. We 'stop, simplify and standardise' work and invest most of the savings in customer service. Through tight cash management we have now increased net cash from £27.1m last year to £63.4m this year.

DRIVE (commenced March 2006)

Booker Wholesale, our cash and carry business, served 465,000 customers this year up from 444,000 last year. Guy Farrant and the team continue to 'Drive' choice, price and service. Each year we survey 40,000 customers to identify where improvements can be made. Customer Satisfaction improved again this year and our customer count has increased again, up by 21,000 customers.

Choice Up

·; In 2007 we launched Euro Shopper as an entry price brand for independent retailers. It now has retail sales of £134m. The range has 60 products and retailers achieve a minimum of 30% margin. Our Euro Shopper soft drinks are doing particularly well.

·; In 2010 we launched Farm Fresh. Sales in the year were £45m. The quality and freshness of the produce is second to none and can be delivered to our customers within 48 hours of being harvested.

·; Chef's Larder is our own label brand for caterers. Sales were £183m, up 15% on the prior year. Progress has been made across the range, for example we reinvigorated Chef's Larder Cheese. Our speciality cheese is now sourced from award winning creameries. The flavours, texture and packaging have been improved.

Prices Down

·; Ours is a very price competitive market. Every week we monitor prices versus competitors. During the year our price index remained competitive. Customer Satisfaction for our pricing has made good progress.

Better Service

·; Stock availability further improved to be the best we have achieved in six years.

·; Our people are doing a brilliant job. Our customers rate Booker people highly. Business Centre teams have been trained in PRIDE to help improve the Parking, Reception, Internal, Delivery and Exit experience.

Catering

·; Catering Sales grew by 6.1% to £1.2bn, because our choice, price and service continued to improve. 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 14,000.

Premier

·; Premier, Booker's symbol group, grew by 11%. The estate grew to 2,702 stores. The retail development team has put a lot of work into compliance and building the sales and profits of existing Premier stores.

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 142 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. If you visit Brighton you will see one of our latest 'Extras'. It has an outstanding fresh foods offer, Ritter speciality foods section and a Classic on trade section. The lessons from Brighton will be rolled to the rest of the business over the next five years.

Harnessing the Internet

·; Sales of booker.co.uk were £635m, up from £526m last year and £15m in 2005. All these sales are delivered to our customers' premises. We have 170,000 customers registered on the website compared to 102,000 last year. Customers can view their account details, use an iPhone app and order products.

Booker Direct/Ritter-Courivaud/Classic/Chef Direct

·; Mark Aylwin and his team are building our delivered wholesale business. Booker Direct has great customers including the prison service in England and Wales, Marks & Spencer and most of the cinema chains.

·; In 2010 we acquired Classic, an on-trade wholesaler supplying pubs and licensed customers mainly in the North West. We are taking some of the Classic range into Booker nationally. In July we launched Classic in Brighton and it has become the second largest on-trade wholesaler in that market. We will be rolling Classic out to a further 5 sites in the year ahead.

·; In 2010 we acquired Ritter-Courivaud, a leading speciality food supplier to restaurants. Through combining the logistics expertise we have in Booker Direct, with the catering knowledge from Ritter and the Groups' buying scale, we are now launching Chef Direct. Chef Direct will be based in Didcot and will become "the new force in foodservice".

·; In the last year Booker Group delivered £1.1bn 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 10,000 customers and the customer reaction has been excellent. We have also launched 118 Happy Shopper symbol retailers which harness the lessons from Premier in the UK for the Kirana stores of Mumbai. In 2011 we opened our first joint venture business centre in Pune. Our partner in Pune is Satnam Arora, who has expertise which compliments our own. In 2012 we opened our second branch in Mumbai which is performing well. We look forward to developing the Booker offer to become the best choice, price and service supplier to Kirana stores and caterers.

Sustainability

·; Booker was the first UK food wholesaler to be awarded the Carbon Trust Standard and remains the only wholesaler to achieve recertification. Our absolute carbon footprint reduced by 4% over the three year period to March 2011 despite growing sales by 21%. This helped us achieve 71st place out of 2,100 companies in the Government's first CRC league table.

·; We have recycled 5.4m litres of used cooking oil from our catering customers.

·; We have sent 15% less to landfill, in spite of increasing sales by 7%. Recycling has increased by 18% and we now have 65 branches who send food waste to Anaerobic Digestion

·; We have customer packaging recycling centres in all business centres and are helping our customers save money, increase recycling and support more sustainable communities throughout the UK.

People

·; The progress at Booker has been achieved by our great team of people. We are committed to continuing to make Booker better and safer for colleagues. We are also developing talent. For example, there is a shortage of butchers in the trade, so we have partnered with the University of West London to develop a formal "butchery apprenticeship". 31 new butchers graduated this year and 50 signed up for the next scheme. We developed a similar scheme for greengrocers with 33 colleagues graduating this year and 50 signing up for the coming year.

·; For the sixth year running, the performance of the business means our people have shared in our success through our bonus system. With this great team of people Booker will continue to make progress in the year ahead.

Our plan to Focus, Drive and Broaden the business is on track. Customer satisfaction improved further, we served 22,000 more customers and grew sales by over £260m. Internet sales grew 21% to £635m. Booker Direct is trading well and we are in the process of launching Chef Direct. We are pleased with the performance of Booker India. We remain committed to helping our 481,000 customers prosper in the year ahead.

Charles Wilson

Chief Executive

group finance director's report

Financial Review

2011/12 was a 53 week reporting period. In order to make a comparison to last year, all reported income statement numbers in the Financial Review are stated on a 52 week basis.

The summary of results for the group is as follows;

Overall Group revenue increased by 7.3% (2011: +6.2%) to £3.9bn. Non tobacco like for like sales increased by 5.1% (2011: +5.3%) while like for like tobacco sales increased by 7.8% (2011: +4.9%).

Operating margin increased by 0.17 percentage points to 2.30% (2011: 2.13%) increasing group operating profit by £12.1m to £88.6m. The improvement in margin was due to a favourable product mix and control of costs.

The net finance credit of £1.1m (2011: £5.1m charge) comprised:

·; net cash interest cost of borrowing of £0.8m (2011: £5.1m)

·; the amortisation of fees and discounting of provisions of £4.3m (2011: £4.0m)

·; a credit relating to the expected return on pension scheme assets less amortisation of liabilities of £6.2m (2011: £4.0m)

Profit before tax rose £18.3m to £89.7m (2011: £71.4m), an increase of 25.6%.

The effective tax rate (being the tax charge as a percentage of profit before taxation) for the Group of 17.5% (2011: 17.2%) 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 £74.0m, an increase of £14.9m compared to 2011.

Basic earnings per share rose to 4.77p, up 22.3% from 3.90p in 2011.

Dividend

Given the strong operational performance and cash flow of the business the Board is recommending a final dividend of 1.95 pence per share (2011: 1.40 pence per share) payable (subject to shareholder approval at the Annual General Meeting, to be held on 18 July 2012) on 20 July 2012 to shareholders on the register at 8 June 2012. The shares will go ex-dividend on 6 June 2012.

The final dividend increases the total dividend for the year to 2.28 pence per share, up 37% on 2011 (2011: 1.67 pence per share).

Cash Flow

Management has continued to focus on cash generation resulting in a net improvement of £36.3m in the year to close with a net cash position of £63.4m at 30 March 2012. Earnings before interest, tax, depreciation and amortisation ('EBITDA') of £102.4m for the 53 week period, up from £89.2m in the prior year, funded capital expenditure of £24.1m (2011: £11.9m) and the payment of £26.5m of dividends (2011: £19.5m).

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 30 March 2012, the Scheme had an IAS 19 deficit of £19.0m (2011: £8.0m), comprising Scheme assets of £555.7m and estimated liabilities of £574.7m.

The Group contributed £8.4m (2011: £11.0m) in the year of which £1.2m (2011: £1.0m) was in relation to the costs of administering the Scheme.

During the prior 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 (2011: £436.4m). 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 10.8% (2011: 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 30 March 2012, the Group had net cash of £63.4m (2011: £27.1m).

Borrowing Facilities

The Group's facilities at March 2011, which ran to June 2012, comprised a secured £121.0m revolving credit facility (including a £7.9m guarantee facility) and a £20.0m bank loan. The £20.0m bank loan was repaid on 24 June 2011, reducing facilities to £121.0m.

The Group entered into a new five year facility on 28 July 2011, which replaced the existing facility, comprising an unsecured £120.0m revolving credit facility (including a £5.0m guarantee facility). The revolving credit facility is unsecured against the assets of the Group although there are cross guarantees between all Group companies (other than dormant subsidiaries). The facility is available until July 2016.

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 Fixed Charge Cover, measured by the ratio of EBITDAR (earnings before interest, tax, depreciation, amortisation and rent) to interest plus rent (tested half yearly on a rolling basis) being greater than 1.5, and Leverage, measured by the ratio of net debt to EBITDA (earnings before interest, tax, depreciation and amortisation) (tested half yearly on a rolling basis) being less than 3.0.

The Group complied with its covenants throughout the year. At 30 March 2012, under UK GAAP, the Group achieved a Fixed Charge Cover of 3.1 and Leverage of nil, comfortably exceeding its covenant obligations.

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

Funds drawn on the revolving credit facility bear floating interest rates linked to LIBOR plus a margin of 1.25%, where the ratio of net debt/ EBITDA is less than one. A commitment fee is payable at 0.5% of the unutilised facility.

The net cash interest cost of borrowing of £0.8m (2011: £5.1m) has reduced due to the staged repayment of loans to £nil over the two year period, the lapsing of a hedge instrument in March 2011 and the reduction in borrowing rates.

Liquidity

At 30 March 2012, the Group held £63.5m in cash and cash equivalents and had £0.1m of finance leases. The Group also had in issue £4.3m of guarantees (2011: £19.3m) leaving undrawn facilities at 30 March 2012 of £115.7m.

The peak level of drawdown on the revolving credit facility on a cleared basis in the year to 30 March 2012 was £54.6m giving a minimum facility headroom in the year of £60.4m 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 30 March 2012 was challenging with the continued impact of the 'credit crisis' 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 53 weeks ended 30 March 2012

All of the Group's operations during the period shown above represent continuing operations.

Consolidated Statement of Comprehensive Income

For the 53 weeks ended 30 March 2012

Consolidated Balance Sheet

As at 30 March 2012

These financial statements were approved by the Board of Directors on 23 May 2012 and were signed on its behalf by:

Charles Wilson Jonathan Prentis

Director Director

Consolidated Cash Flow Statement

For the 53 weeks ended 30 March 2012

Consolidated Statement of Changes in Equity

53 weeks ended 30 March 2012

52 weeks ended 25 March 2011

Notes to the Group Financial Statements

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 53 weeks ended 30 March 2012 or the 52 weeks ended 25 March 2011 but is derived from those accounts. Statutory accounts for 2011 have been delivered to the registrar of companies, and those for 2012 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 group financial statements have been prepared in accordance with International Financial Reporting Standards ('IFRS') adopted for use in the EU as at 30 March 2012 ('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 prior period, the Group made two acquisitions, and the requirements of these standards have been applied in accounting for these transactions.

The Group has adopted the following amendents and interpretations which do not have a material effect on the financial statements:

·; Amendments to IFRIC 14 IAS 19 'The Limit on a Defined Benefit Asset, Minimum Funding Requirements and their Interaction'

·; IAS 24 'Related Party Disclosure' (revised)

·; Improvements to IFRSs (issued May 2010)

·; IFRIC 13 'Customer Loyalty Programmes - Fair Value of Award Credit' (Amended)

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 1.95 pence per share, which will absorb £30.6m of equity (distributable reserves). Subject to shareholder approval at the AGM, to be held on 18 July 2012, the dividend will be paid on 20 July 2012 to shareholders on the register at 8 June 2012. The shares will go ex-dividend on 6 June 2012.

6. Property, plant and equipment

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.

9. Related party transactions 

The Group has a related party relationship with its subsidiaries and with its directors. Transactions between group companies, which are related parties, have been eliminated on consolidation and are not disclosed in this note. There have been no material related party transactions with directors.

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

23 May 2012