Interim Results. 15 October 2015

Transcription

1 Interim Results 15 October 2015

2 HIGHLIGHTS Financial Highlights Total sales 2.2bn, -1.0%. Like-for-like non tobacco sales up 0.6% and tobacco sales down 3.7% Operating profit 75.0m, +10% Profit before tax 74.1m, +10% Profit after tax 60.8m, +10% Basic earnings per share up 9% at 3.45 pence Net cash of 118.1m Interim dividend of 0.57 pence per share, up 10% As previously indicated, intended return of capital in July 2016 Operational Highlights Our plan to Focus, Drive and Broaden Booker Group continues to make progress Customer satisfaction was good Internet sales up 11% to 461m in the half Booker Direct, Ritter Courivaud, Classic and Chef Direct continue to make good progress Acquisition of Budgens and Londis successfully completed Booker India is on track 2

3 PLAN UPDATE

4 Booker Group; growing with professional customers 5.6 bn 0.4 Small Business/ Other 782k bn 0.9 Caterers 468k Retailers 125k Delivered Sales FY08 0.6bn FY15 * 2.2bn *Including full year of Budgens and Londis 4

5 THE PLAN (NOV 2005) ACTION RESULTS FOCUS (Nov 05) Focus on Cash Reduce Costs to be most efficient operator Simplify the Business: less is more DRIVE (Apr 06) BROADEN (Apr 07) Improve Customer Satisfaction Choice up Prices down Better service On the way to offering the best choice, price and service to caterers and retailers and small business via the internet, delivery and cash and carry Be the suppliers preferred route to market in UK New products, services & customers 5

6 FOCUS On Track Cash 118m 100 Costs Group Retail / Catering Structure Group Regional / buying structure Stop / Standardise / Simplify process Common fleet of 3 vehicle types under Booker Direct banner 6

7 DRIVE: All in Booker Group are proud to serve independent, multi site and national customers RETAIL CATERING & SMALL BUSINESS Independent 3.1bn 1.8bn Multi-Site 0.3bn 0.1bn National Chains 0.2bn 0.1bn TOTAL 3.6bn 2.0bn Note: includes Londis and Budgens 7

8 DRIVE: Prices Down Prices relative to the market Booker s Pricing vs Cash & Carry Market 4.0% 3.5% CATERING RETAIL 3.0% 3.0% 2.0% 1.0% 1.0% 0.5% 0.0% -1.0% -2.0% -3.0% -1.9% -2.3% -1.4% -1.4% -1.5% -1.5% -1.7% -1.6% -1.8% -1.9% -2.1% -2.2% -2.1% -2.1% -2.4% -2.3% -2.4% -2.4% -2.6% -2.5% H1 Year Source: IRI Research Price of some key catering lines May 2013 May 2014 May 2015 Sept 15 H1 CL Mild Cheddar 5kg Block per kg KTC 20 Litres cooking oil Chef s Essentials 2.27kg Frozen chips Iceberg Lettuce x Coke Icon NRB 24x330ml Ice Valley Water 24x500ml Source: Company 8

9 DRIVE: Satisfaction Booker Wholesale Customer Satisfaction (% recommend) Source: ESA Marketing customer survey on behalf of the Company 9

10 DRIVE IS WORKING LFL Sales to Retailers (inc Tobacco) % Change Year On Year LFL Sales Non Tobacco % Change Year On Year HI LFL Sales to Caterers (inc Tobacco) HI % Change Year On Year HI 10

11 BROADEN: We continue to develop our digital operations H1 Web Sales 109m 250m 407m 525m 635m 704m 777m 874m 461m % Change 165% 129% 63% 29% 21% 11% 10% 12% 11% Active Customers 12k 19k 37k 105k 170k 255k 334k 410k 450k 11

12 BROADEN: We are joining forces with Budgens and Londis to strengthen our retail offer 2014 Sales m % Consumers ABC1 Improve Fresh Private Label Scale & Local 12 na 12

13 The businesses are complimentary Brand - Core Geographies C&C Store / Distribution Centre Network 13

14 BROADEN: Budgens and Londis expected to contribute a loss of 3m in current year with profit of 5m next year BACKGROUND IMPACT ON BOOKER GROUP Act Dec 12 m Act Dec 13 m Act Dec 14 m Est Mar 16 m Est Mar 17 m Sales m Expected operating loss Operating loss before exceptionals m Synergies Impact on Booker Group Notes: Londis and Budgens year end is December Booker acquired Londis and Budgens on 14 September 2015 and results will be consolidated from that date 14

15 BROADEN: In India we are on track Surat Mira Road Chandivali Pune Thane Goregaon 6 Business Centres 189 Happy Shoppers 15

16 SUSTAINABILITY Carbon Trust Standard achieved for both Carbon and Waste 2.8m Litres of oil re-cycled 7,500 Tonnes of card collected Over 19,000 customers re-cycle with the Group Surplus food equivalent to over 162,000 meals donated to local charities in the first half of the year 16

17 FINANCIAL PERFORMANCE and GUIDANCE

18 FINANCIAL SUMMARY 24 weeks 24 weeks 11-Sep Sep-14 m m % Revenue 2, , % - Tobacco % - Non tobacco 1, , % Operating profit % Profit after tax % Basic earnings per share (pence) % Interim dividend per share (pence) % Net cash Shareholder funds

19 PROFITS 24 weeks 24 weeks 11-Sep Sep-14 m m Operating Profit Operating Profit % of Sales 3.3% 3.0% Net financing costs (0.9) (0.7) Profit before tax Tax (13.3) (12.1) Profit after tax Tax rate 17.9% 18.0% 19

20 CONSOLIDATED BALANCE SHEET 11-Sep Sep-14 m m Tangible fixed assets Intangible fixed assets Investments Stock Debtors Creditors (603.8) (632.4) Net cash Provisions & tax (17.1) (19.2) Pensions (36.1) (11.9) Net assets

21 CASH FLOW 21

22 GUIDANCE: Capital Return The Makro equity consideration was 124m Following the successful integration of Makro into the Group and strong cash generation, we returned to shareholders approximately 61m in 2014 and 62m in 2015 by way of a new class of B shares redeemable for cash. Details were set out in circulars published along with the notices of Annual General Meeting at which shareholder approval was sought As previously indicated, we intend to make a similar return to shareholders in July 2016 and will provide an update on this at the 2016 Final Results announcement in May 2016, in light of circumstances prevailing at that time 22

23 GUIDANCE: Budgens and Londis Income In the year to March 2016, the expected operating loss arising from Budgens / Londis will be approximately 9m. After group synergies of circa 6m, the net effect on the Group's operating profit will be a charge of the order of 3m In the year to March 2017, the operating loss is expected to be circa 7m and group synergies in the order of 12m giving a net credit to the Group's operating profit of approximately 5m Tax losses are expected to reduce the Group s effective tax rate by circa 1% points over the next three years Exceptional items Deal fees, including stamp duty and competition advice, are circa 2.3m. These will be charged to income in the second half of the year to March 2016 Balance Sheet We are required to fair value the assets and liabilities of Budgens / Londis at 14 September 2015, the date of acquisition. Values will be placed on the company's interest in its properties, its working capital, its pension liabilities and its brands 'Budgens' and 'Londis' 23

24 GUIDANCE: Other Outlook we completed the acquisition of Budgens and Londis on 14 September Overall, the Group s trading in the first four weeks of the current half year is ahead of the same period last year. We anticipate that the challenging consumer and market environment will persist through the coming year and the UK s food market remains very competitive Whilst there is increasing price competition in the UK grocery and discount sectors, we will continue to deliver our plans to offer our customers even better choice, prices and service. We are on track to deliver an outcome for the financial year in line with our plans and to make progress in this challenging environment Pensions the Booker Pension Scheme ( the Scheme ) is a defined benefit scheme, closed to new members in 2001 and to future accruals for existing members in At September 2015, the Scheme had an IAS19 deficit of 36.1m following the 2013 Triennial valuation, agreed with the pension fund Trustee in March 2014, there will be no cash contributions required from the company after the scheduled quarterly payment of 2.4m on 31 March 2014, subject to the results of subsequent Triennial valuations. The next Triennial valuation date is 31 March 2016 Facilities the Group has a new 5 year facility which commenced on 19 August 2015 comprising an unsecured 120.0m revolving credit facility two covenants apply; fixed charge cover (EBITDAR/ (Net interest + rent) > x1.5) and Leverage (Net borrowing/ EBITDA < x3.0). Both tested at half and full year Bank interest funds drawn on the revolving credit facility bear floating interest rates linked to LIBOR plus a margin of 0.80% (where borrowings/ EBITDA < 1.0) commitment fee is 0.28% of the unutilised facility Liquidity at 11 September 2015, 118.1m was held in cash and cash equivalents at 11 September 2015, the Group had undrawn facilities of 120.0m the Group did not draw down its revolving credit facility in the period to 11 September 2015 Tax tax of 13.3m on the profit before tax for the 24 weeks ended 11 September 2015 is based on an underlying effective rate of 17.9%, which has been calculated by reference to the projected charge for the full financial year the Group holds significant tax assets, notably Makro tax losses and ACT, which continue to be unrecognised as the quantum and timing of their utilisation remains uncertain utilisation of these assets could result in the underlying effective rate of tax remaining below the standard rate for the next three years Dividends the interim dividend per share attributable to 2015/16 was up 10% at 0.57 pence per share (2014/15: 0.52 pence per share) in July 2012 Booker Group plc issued 124m of shareholder equity to acquire Makro in the UK. Following the successful integration of Makro into the Group and a period of strong cash generation, the Board implemented a capital return to shareholders of 3.50 pence per ordinary share in July 2014 (equivalent to approximately 61m) and a second capital return to shareholders of 3.50 pence per ordinary share in July 2015 (equivalent to approximately 62m). These were achieved by the issue of a new class of B shares which shareholders were able to redeem for cash. Details of the return of capital were set out in circulars to shareholders which accompanied the notice to the Annual General Meetings held on 9 July 2014 and 8 July Approval from shareholders was given at those meetings as previously indicated, we intend to make a similar return to shareholders in July 2016 and will provide an update on this at the 2016 Final Results announcement in May 2016, in light of circumstances prevailing at that time 24

25 SUMMARY Half Year Net (debt)/cash m Sales Change % Operating Profit m* Sep Sep Dividend per Share p Sep Sep p Sep p Sep p Sep p Sep p Sep p Sep p Sep p Notes: Operating profit as stated before exceptional items (*) 2013 figures have been restated due to the adoption of IAS19 (Revised) Employee Benefits 25

26 DISCLAIMERS This presentation may include oral and written forward-looking statements with respect to certain of Booker Group plc's ( Booker ) plans and its current goals and expectations relating to its future financial condition, performance and results. These forward-looking statements sometimes contain words such as anticipate, target, expect, intend, plan, goal, believe, may, might, will, could or other words of similar meaning. By their nature, forward-looking statements involve known and unknown risks and uncertainties because they relate to future events and circumstances which may be beyond Booker s control, including, among other things, UK domestic and global economic and business conditions, market-related risks such as fluctuations in interest rates and exchange rates, the policies and actions of regulatory authorities, the impact of competition, the possible effects of inflation or deflation, the impact of tax and other legislation and regulations in the jurisdictions in which Booker operates, as well as the other risks and uncertainties set forth in this presentation of interim results for the 24 weeks ended 11 September 2015, released on 15 October As a result, Booker s actual future financial condition, performance and results may differ materially from those expressed or implied by the plans, goals and expectations set forth in any forward-looking statements, and persons receiving this presentation should not place reliance on forward-looking statements. Booker expressly disclaims any obligation or undertaking (except as required by applicable law) to update the forward-looking statements made in this presentation or any other forward-looking statements it may make or to reflect any change in Booker s expectation with regard thereto or any changes in events, conditions or circumstances on which any such statement is based. Forward-looking statements made in this presentation are current only as of the date on which such statements are made. All oral or written forward-looking statements attributable to the Directors of Booker or persons acting on their behalf are qualified in their entirety by these cautionary statements. None of the statements in this presentation are, nor are any intended to be, a profit forecast and none should be interpreted to mean that the profits or earnings per share of Booker in the current or any future financial period necessarily is or will be above or below the equivalent figure for any previous period. 26