Makro acquisition delivers boost for Booker

Online deliveries have powered a surge in profits at Booker, which revealed its first figures yesterday since sealing a buyout of a smaller cash-and-carry group, Makro.

The cash-and-carry group announced its acquisition of Makro last year but was delayed by the Office of Fair Trading referring the deal to the Competition Commission, which finally cleared it last month.

Excluding Makro, Booker’s revenue rose 3.5 per cent to £4 billion, with pre-tax profit rising 13 per cent to £101 million.

Charles Wilson, the chief executive, said that underlying sales at the group had increased by about £940 million since 2010. “A lot of that has been ‘delivered’,” he said, referring to its online ordering service.

He said that the company had already begun folding Makro into the group. “Customers are beginning to see some Booker lines going into Makro and Makro lines going into Booker. That will improve price perceptions, particularly for Makro,” he said. The two brands will remain separate, with Booker focusing on supplying small retailers.

“What we will see, whether Booker or Makro, is choice, price and service improving and a lot of ‘delivered’ growth.”

The company’s franchised chain of convenience stores, Premier, enjoyed an 11 per cent rise in sales, which Mr Wilson said was mainly through better trading at existing shops rather than recruiting new franchisees.

“We’ve been doing more deliveries [to Premier shops] and that’s helped them improve availability, especially during bank holidays. Premier is doing well within the convenience market at the moment and we’re still expecting to grow, taking Premier into markets where it is under-represented,” he said.

Philip Dorgan, an analyst at Panmure Gordon, said: “We are assuming that Makro will enhance earnings from year one, and we believe that there is upside potential to our long-term forecasts.”

The company raised the dividend 15 per cent to 2.6p a share.

Shares in Booker rose 1¾p to 131½p, valuing it at £2.2 billion.

Source : Marcus Leroux – The Times
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