Booker Group Share Discussion Threads

[woodpeckers] 05/6/2015 09:36

Barclays reiterated their overweight rating on shares of Booker Group Plc (LON:BOK) in a research report sent to investors on Friday morning. The firm currently has a GBX 187 ($2.86) price target on the stock.

Don't forget BOK goes ex-div (3.14p) next Thursday and July 9th for the special div (3.5p).

[woodpeckers] 04/6/2015 16:24

Well, can't blame them, they've earned it!

[woodpeckers] 03/6/2015 12:46

Well that little retrace didn't last long! Good to see it really motoring again today.

[woodpeckers] 29/5/2015 12:37

Certainly not being pulled back now! :-)

[pilly11] 29/5/2015 12:26

yep or anticipation that approval will go through

looked like it wanted to go through 170p yesterday but was pulled back

[woodpeckers] 29/5/2015 11:11

Wonder if it has anything to do with approval for the takeover? Not usually leaky though.....

[pilly11] 29/5/2015 11:09

Anyone got a rocket!!

[woodpeckers] 28/5/2015 08:14

Trust no one minds me posting these articles but it's a good way to keep everything together for future reference.

"Booker to buy Musgrave GB

Posted: 27 May 2015

Leading UK wholesaler Booker has agreed a £40m deal to buy the operations of Musgrave Group in Great Britain.

Boosts sales by around one-fifth

The move significantly bolsters Booker's role in UK wholesaling and its symbol group presence, through bringing Musgrave's Budgens and Londis formats into the Booker stable. In 2014 Musgrave GB's sales were £833m (£504m from Londis and £329m from Budgens), at wholesale value.

Booker also this week announced its preliminary results for 2014/15, confirming sales up 1.5% to £4.8bn. This means the acquisition of Musgrave GB will effectively boost Booker Group's annualised turnover to £5.6bn, significantly enhancing its scale as the largest UK wholesale business in the food and grocery sector.

Adds 1,800 stores to the Booker symbol network

Londis, one of the UK's longest established symbol groups, currently has 1,630 stores, while Budgens has 167. Along with Booker's existing network of 3,200 affiliated symbol stores, primarily under the Premier fascia, the deal will create a total symbol group network of 5,000 stores, twice the size of any other in the market. Adding these two fascias to its portfolio will also give Booker an unrivalled range of options that it can offer to independent retailers, enabling it to meet a broader scope of retailer needs and aspirations.

Significant boost to Booker's distribution capability

In contrast to the predominantly cash & carry format of the Booker operation, Musgrave GB is a dedicated delivered wholesale operation, providing a distribution service to its member stores, from four depots nationwide (though lacking a presence in Scotland). While Booker has built a greater customer distribution capability to enhance its wider service offer, the addition of the Musgrave GB infrastructure will give it a ready-made specialist network with which to extend its delivery reach to retail customers, and match the other delivery specialists in the channel, such as SPAR and Palmer & Harvey. The combined value of this delivered business within the expanded group would be c. £2.2bn, versus £3.4bn in cash & carry.

An end to Musgrave's GB foray

Having entered to UK with the acquisition of first Budgens and then Londis, Ireland headquartered Musgrave has operated on mainland Britain for over a decade. Seeking to emulate its highly successful Irish model of affiliated store networks (SuperValu and Centra), it has struggled to build the equivalent standards and discipline within the Londis group and has been unable to find significant numbers of new recruits for the more quality focused Budgens. This has contrasted markedly with the rapid growth of Booker's symbol network, which has focused on smaller stores and offered subsidised membership, while allowing greater freedom to retailers to be more entrepreneurial."

[woodpeckers] 27/5/2015 18:17

More...
Booker to buy Londis and Budgens

Published: May 26, 2015 by Peter MacLeod


Booker Group, Britain's biggest cash-and-carry wholesaler, is to buy Londis' 1,630 convenience stores and Budgens' 167 franchise outlets from Ireland's Musgrave Retail Partners.

Londis and Budgens have struggled to compete in the ongoing 'supermarket war', and together made a combined operating loss of £7.4m in 2014 on sales of £504m and £329m respectively. The £40m deal takes Booker back into the mainstream grocery market - it owned Budgens between 1956 and 1986.

Musgrave has owned Londis and Budgens since 2002. Its chief executive Chris Martin said: "The grocery market in Great Britain is experiencing fundamental and permanent structural change, with intense competition and a deflationary environment.

"Given these challenging market dynamics, we carefully evaluated all of the possible options for our [British] business."

Booker - whose chief executive Charles Wilson was Sir Stuart Rose’s right-hand man at Marks and Spencer prior to taking the role at Booker - said that access to its supply chain and economies of scale are expected to boost Londis and Budgens' financial performance.

"We anticipate that the acquisition will be earnings neutral in the first complete year of ownership and earnings enhancing thereafter," said Booker.

While Booker’s existing brands, Premier and Family Shopper, operate predominantly in northern Britain, Londis and Budgens are based mainly in the south of the country.

With UK consumers choosing to shop locally and more frequently, the acquisition appears to be well timed and will help Booker to compete with the country's four big supermarkets as they expand their own local convenience store networks amid an industry price war. "Overall it will help independent retailers prosper," said Wilson.

Analysing the deal, the Institute of Grocery Distribution said: "In contrast to the predominantly cash & carry format of the Booker operation, Musgrave GB is a dedicated delivered wholesale operation, providing a distribution service to its member stores, from four depots nationwide (though lacking a presence in Scotland).
"While Booker has built a greater customer distribution capability to enhance its wider service offer, the addition of the Musgrave GB infrastructure will give it a ready-made specialist network with which to extend its delivery reach to retail customers, and match the other delivery specialists in the channel, such as SPAR and Palmer & Harvey. The combined value of this delivered business within the expanded group would be c. £2.2bn, versus £3.4bn in cash & carry."

At the same time as last week's announcement, Booker revealed its full-year results, with pre-tax profits rising 14% to £138.8m.

[woodpeckers] 27/5/2015 18:11

Worth a read. Didn't know this: ". Interestingly, Booker used to own Budgens, but sold it in 1982 for £82 million."

"When companies make acquisitions, there is plenty that can go wrong: the company can often take longer to merge into the parent; management can overpay should a rival company decide that it likes the idea of buying growth on the open market, too; worse still, management can take their eye off the ball, causing normally avoidable problems to occur at the company making the acquisition.

In short – investors need to tread carefully when acquisitions are announced.

So when Booker (LSE: BOK) announced its results and the acquisition of Musgrave Retail Partners GB Limited, which comprises the Budgens and Londis businesses, for £40m in cash last Thursday, investors marked the shares up 10%. This says two things to me:

Booker has paid a good price for the business;
The market believes that Booker’s management team is very capable of turning this (currently loss-making) business around.

Let’s have a look at the deal itself, together with the rationale behind it…
Price Is What You Pay…

Booker paid £40 million on a “cash free/debt free basis” with a normalised level of working capital – in essence, it is starting with a level playing field. Interestingly, Booker used to own Budgens, but sold it in 1982 for £82 million.

Londis started life as a mutual, and got going in the 1950s – it was brought into the Musgrave fold in 2004.

The most recent figures show that, between them, they made a loss of £7.3 million on turnover of £833 million.

Whilst this doesn’t sound like a business that you would want to stump up your hard-earned cash for, there’s a bit more to it than that.
Value Is What You Get….

By joining forces with Booker’s current franchise operations, mainly in the form of Premier, the group will almost double the size of its operation, giving it a market share of around 9.4%. In addition, it says that it will help independents compete with the multiple convenience stores – leading to better choice (e.g. fresh), prices and service.

The geographical and consumer profiles of the businesses are complementary and, together, Booker believes that they will help the retailer improve sales to the consumer.

Interestingly, the deal includes the Budgens and Londis supply chain – this can also serve Premier and independent retailers, improving utilisation and saving costs. Additionally, it provides Premier/Booker help with chilled ranges, whilst Budgens and Londis can benefit from a better local and national supply chain, with improved availability, choice and service.

To me, this deal seems to benefit all concerned and, importantly, is a direct attempt to take on the other players in the grocery and convenience market, currently estimated to be worth £37.4 billion in 2014 (+5.2% on 2013). This is where the growth is currently. Perhaps unsurprisingly, multiple retailers and discounters have increased space by 37% since 2007 — One Stop, Tesco Express, Coop, Sainsbury’s Local, Asda, Waitrose and other multiples expanding their convenience operations — One Stop (part of Tesco (LSE: TSCO) is becoming a franchise business, too.
Which One Should You Buy?

Turning to the chart covering the last 12 months, it is clear which share you should have bought. As we know, however, the stock market is all about the future – what will the next 12 months bring?

For my money, both J Sainsbury (LSE: SBRY) and Tesco have their work cut out – they need to fix their retail operations. This, amongst other things, has caused them to focus on their balance sheets, one of the results of which is a dividend cut at Sainsbury’s (and Tesco famously cancelled its final dividend).

Booker, on the other hand, has proved adept at turning around failing businesses – it finished the year with a £147 million cash balance, allowing it to increase the dividend by over 14% and pay a further capital return of 3.5 pence per share. This is also expected to be repeated next year.

Whilst I would be the last person to write off any of the supermarkets, I wouldn’t be a buyer of the shares currently. I would, however, be looking to pick up some shares in Booker on weakness as part of a diversified income portfolio.

[woodpeckers] 23/5/2015 09:46

This article is interesting. It seems there is more to the deal than a simple straightforward purchase of Londis and Budgens.


Musgrave Group exits Britain in €57m deal with Booker
Company had been working on turnaround of business and had reduced losses
Musgrave said it was planning to develop a strategic partnership with Booker to collaborate on store formats, digital innovation, buying opportunities, sharing of best practice and to achieve cost savings and efficiencies for the business.

Musgrave said it was planning to develop a strategic partnership with Booker to collaborate on store formats, digital innovation, buying opportunities, sharing of best practice and to achieve cost savings and efficiencies for the business.
Ciara O'Brien, Mark Paul

Thu, May 21, 2015, 08:25

Musgrave Group is selling its loss-making British business, which operates the Budgens and Londis brands, to Booker for €57 million.

The move follows Musgrave last summer writing down about €131 million in relation to the operation, which covers about 1630 franchised Londis stores and 167 Budgens outlets.

Musgrave said the deal would allow it to concentrate on its business in the Republic, the North and Spain. The group’s chief executive, Chris Martin, described the decision to sell as difficult and said it was taken after careful evaluation of the options.

“Having received a proposal from Booker, we concluded that a sale to Booker is the right thing for the group and would be the most advantageous outcome for our retailers, colleagues and suppliers in Great Britain,” Mr Martin said.

The company had been working on a turnaround of the British business and had narrowed losses from €21 million to €7 million, he added, noting that the he does not foresee further “significant” writedowns on the business.

Mr Martin said Musgrave had looked at the option of buying other companies in the UK to achieve scale, but felt the opportunities were not available. It would also have taken too much time, he said, to grow the operation while absorbing more losses all the while.

“You really need scale. Booker approached us and we felt this was a better outcome,” he said.

Under the deal, Musgrave has entered a strategic partnership with Booker. This will include the Irish company learning from Booker’s advanced digital operations. It will also include Musgrave possibly using some of Booker’s suppliers in a buying arrangement.

When asked if this might displace some Irish suppliers to Musgrave, Mr Martin said: “No, I don’t think so. I wouldn’t look at it that way.” He said there might also be opportunities for Irish suppliers to Musgrave to sell into Booker in the UK.

[woodpeckers] 23/5/2015 09:25

Mmm, wish I'd started investing in 2007. I first bought these late 2009 at 50pish so still a great investment which looks set to continue.

Another article out from wholesalenews:

Another strong set of results for Booker

Published: 21 May, 2015

As well as announcing a proposed takeover of Londis and Budgens, Booker today also posted a strong set of preliminary annual results (52 weeks to March 27, 2015), sending the price of shares in the wholesaler up this morning.

Total Group sales (including Booker India and Makro) were up 1.5% to £4.8bn, and operating profit was up by 17% to £140.3m; post-tax profits were up 12% to just under £118m. Internet sales were up by 12% to £874m.

Booker like-for-like sales, excluding Makro, were up 2.3%, tobacco sales went up by 1.1% in a very challenging market and non-tobacco sales (again excluding Makro) were up 2.9%. Catering/foodservice like-for-like sales were up 2%.

CEO Charles Wilson (pictured) told Wholesale News: “It’s been another good year, in fact it has been a good decade for Booker… delivered sales are now £1.4bn, compared to just £600m in 2008. We have continued to simplify the business, improve customer satisfaction and our prices [to our retail and catering] customers are below the market average.

“Customer satisfaction levels [measured by him! and Booker] are now running at 85.6%, compared to 78.2% in 2007, and we now we serve independents, multi-sites and national chains in both retail and catwering.

“With Budgens and Londis, we have two fascias that will complement our existing Premier and Family Shopper offers. We also have brands, from Euro Shopper and Chef’s Essentials to Ritter Courivaud, Classic Drinks and Chef’s Larder for every kind of retail, catering and SME customer.”

He added that 11 Booker and Makro branches were now “folded in” together, and that 80% of the company’s vehicle fleet had now been updated.
- See more at:

[hedgehog 100] 22/5/2015 20:19

At 169.4p, BOK has 20-bagged from its early 2007 low of about 8p, hit shortly before Booker's RTO (reverse takeover) here.




"Booker to Return to Stock Market With Blueheath Deal (Update3)

By Trista Kelley - May 9, 2007 12:12 EDT

May 9 (Bloomberg) -- Booker Group Plc, the largest U.K. food wholesaler, plans to return to the stock market after a seven-year absence by combining with a listed company.

Blueheath Holdings Plc, a wholesaler to convenience stores, said today it will acquire Booker for 1.34 billion shares in a so-called reverse-takeover transaction that gives the larger company's investors 90 percent of the combined entity and provides it with Blueheath's listing on London's Alternative Investment Market.

Charles Wilson, who resigned as executive director at Marks & Spencer Group Plc to rejoin Booker in 2005, will head the combined company as chief executive officer. During his time as head of Marks & Spencer's supply chain, Wilson cut costs by as much as 320 million pounds a year ($638 million).

``Booker has made great progress in the last 18 months and this transaction gives us the opportunity to take the group to the next level,'' Wilson said today in a statement.

Shares of Blueheath more than doubled to 27.5 pence in London, giving the company a market value of 39.5 million pounds, the biggest one-day gain since the company first sold stock to investors in July 2004. ... "




Please note the following thread which may be of interest:

"THE REVERSE TAKEOVERS & SHELLS THREAD (RTO)"

[woodpeckers] 22/5/2015 11:09

Barclays reissued their overweight rating on shares of Booker Group Plc (LON:BOK) in a research report released on Friday morning. Barclays currently has a GBX 187 ($2.94) price objective on the stock.

[nar1] 21/5/2015 13:44

Up she goes

[bad robot] 21/5/2015 13:34

check spdi chaps, 32%up

[nar1] 21/5/2015 10:02

It's positive and today's rise reflects it. Hoping we can start trending upwards now

[woodpeckers] 21/5/2015 09:14

I think the market agrees with you Ayl! :-)

[ayl30] 21/5/2015 08:35

Budgens has to be a great potential addition to the Booker business. Stores are often located in small towns where there is little local competition. The one where I live was refurbed a couple of years ago and ranges improved with higher price point lines introduced. All the convenience of a local store with quality lines more akin to Waitrose/ M&S. Given Bookers ranging in the latter area just shows the potential. This is truly a great acquisition.

[woodpeckers] 21/5/2015 08:34

*Investec Lifts Booker Group Price Target To 185p From 178p, Keeps Buy

[woodpeckers] 21/5/2015 08:30

From the FT

Food wholesaler Booker Group is buying the Londis and Budgens store chains for £40m. A small sum, but these are well-known names, particularly in the South of England. Londis runs 1,630 convenience stores, while Budgens has 167 franchised shops focused on groceries. Charles Wilson, chief executive, is popular with investors and was tipped as a possible Tesco boss, despite having no obvious interest in the role.

His comments this morning hint at an intended fightback by independent retailers against incursions by supermarkets into the convenience store industry.