Booker Group Plc (LON:BOK), the FTSE 250 cash and carry company, today released a trading update for the ten weeks ended August 28, which showed that the company’s had suffered a decline in tobacco sales. The company said that like-for-like sales declined two percent in the period, with tobacco sales down 6.5 percent. Excluding tobacco, like-for-like sales were up 0.5 percent, Booker said.
The company also revealed that its balance sheet remained strong, “with a net cash position as at 28 August 2015 of approximately £110m”. It added that it was on track to meet expectations for the full year.
Charles Wilson, chief executive officer of Booker, commented on the results: “Booker Group continues to make good progress. Our plan to Focus, Drive and Broaden Booker Group is on track.”
The trading update comes a day after Booker was given the green light by the Competition and Markets Authority to buy grocery chains Londis and Budgens. In a separate statement to the London Stock Exchange, the company welcomed the development, saying that the £40-million acquisition would help strengthen its support for “independent retailers throughout Great Britain”. Booker expects the deal to be completed by September 14.
Graham Spooner , analyst at The Share Centre, observed that the trading update and the Londis and Budgens deal were positive news for investors: “The group has delivered a strong performance since Charles Wilson took over as CEO and investors will be hoping that the latest acquisition will be as successful as the 2012 Makro.” The analyst added: “We continue to recommend Booker as a 'buy' for investors. The long-term fundamentals look positive, and it remains attractive to those looking for growth in the sector, thanks to recent acquisitions and plans to expand its consumer base and product range.”
In today’s trading, Booker shares were up 0.1 percent at 179.20p, as of 13:51 BST. The stock has risen 9.5 percent since the start of the year and the company’s market capitalisation currently stands at £3.2 billion.
The 11 analysts offering 12 month price targets for Booker Group Plc have a median target of 180.00p, with a high estimate of 200.00p and a low estimate of 140.00p. As of August 29, 2015, the consensus forecast amongst 12 polled investment analysts covering Booker had it that the company will outperform the market. The same consensus estimate has been maintained since July 07, 2010, when the sentiment of investment analysts deteriorated from “buy”.