WHOLESALE and cash & carry giant Booker saw profit before tax rise 10% in the first half of its trading year, despite a decline in overall sales.
“Despite the challenges in the UK grocery market we continue to improve choice, prices and service for our customers.”
Total sales for the 24 weeks to 11 September were £2.2bn, a decrease of 1% with like-for-like non-tobacco sales up 0.6% and tobacco sales down 3.7%. Half-year profit before tax was £74.1m, up 10%.
The Booker chief said tobacco sales had been depressed by the ban on small stores displaying tobacco products.
“The weather didn’t help, the rise of e-cigs probably doesn’t help, illicit trade doesn’t help. Those are all probably affecting the multiples as well, but the display ban does look to have shifted a bit of volume back into the multiples from the independents,” he said.
“We’re going to be helping our customers manage through further changes as they come and as we continue to improve our fresh offer with the benefits of Budgens and Londis, that will also help them deal with some of the changes in the trade.”
Booker anticipates that in the year to March 2016, the expected operating loss arising from the incorporation of Budgens and Londis will be approximately £9m.
After group synergies of around £6m, the net effect on the group’s operating profit will be a charge of around £3m. However, it is expected to break even the following year, giving a net credit to the group’s operating profit of approximately £5m.
Wilson said that would come through the combination of better efficiency in the network and also growing the businesses of all the Premier, Family Shopper, Budgens and Londis stores using common infrastructure.
Booker sales director – retail, Steve Fox said: “Our ‘Even Bigger POR’ campaign has proved very popular with customers as it has helped them increase their profits.
“Premier continues to perform very well and Family Shopper is on track.
“We are delighted to welcome Londis and Budgens into the group and I’m looking forward to continuing to drive our retail business through improving choice, price and service.”
