Booker numbers hit by falling tobacco sales and food deflation as wholesaler issues “solid” Q1 trading update

Booker Group, the UK’s biggest wholesaler, held its AGM today and issued the following Trading Update:

“Overall Booker Group had another solid quarter. Group sales, including Budgens and Londis, rose by 10.0% on the same period last year. Booker Wholesale with Makro, our cash and carry business, had a good quarter for customer satisfaction and cash profit. Non tobacco sales reduced by 0.7% on a like-for-like basis. These sales were impacted by deflation in food prices and many customers reporting weak consumer demand during the period. Tobacco sales continued to be adversely impacted by the ban on small stores displaying tobacco products, down 7.7% like-for-like. Booker Direct, Chef Direct, Ritter and Booker India performed as we expected. Premier continues to grow and we made good progress with the integration of Budgens and Londis.”

The company, which serves 1.3 million customers, said tobacco sales were down 7.7% on a like-for-like basis for the twelve weeks ended June 17. The business accounted for more than 30% of sales in the full year ended March 25.

Total sales, including the contribution from Londis and Budgens, rose 10%. Investors got a dividend of 3.20 pence per share.

Charles Wilson, chief executive, said: “Booker Group continues to make good progress. Our plans to Focus, Drive and Broaden Booker Group are on track. Budgens and Londis joined the Group last September and are making a solid contribution. We continue to enhance choice, price and service for our retail, catering and small business customers and look forward to growing with them in the year ahead.”

Steve Fox, MD, Booker Group – Retail, said: “Our retail business remains focussed on helping our customers sell more and make more money. We have refreshed our ‘Even Bigger PoR’ campaign and made good progress on improving choice, prices and services for our retailers. Premier, Family Shopper, Londis and Budgens are all performing well and we’re looking forward to serving them through the busy summer period.”

And for foodservice, Stuart Hyslop, MD, Catering & Small Business, added: “Our catering business has delivered a solid performance in the first quarter, as we have continued to focus on delivering great value. We will continue to listen and focus on the areas that matter most to our customers and I’d like to say thank you to them for choosing Booker and Makro.”

Connor Campbell, a senior market analyst at www.spreadex.com, commented: “Given the decline it has seen post-Brexit, Wednesday morning’s meagre 0.6% rise will be little comfort to Booker Group investors. That growth comes following a trading update from the food wholesaler that saw the company reveal a 10% surge in total group sales for the last quarter countered by a 2.9% decrease in like-for-like sales thanks to a plunge in tobacco sales.”

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