Booker starting to see benefits of Makro deal
CASH and carry wholesaler Booker Group is continuing to make progress to return Makro to profitability, and is also planning a cash return of around £60m to investors next year.
Competition regulators finally approved the deal to buy Salford-based Makro in April, and in reporting strong financial results Booker said integration and operational improvements were progressing.
Booker said it is “on track” to achieve around £26m of synergies with Makro in the current financial year, rising to £30m next year and £32m the following year.
It said: “This should help restore Makro to profitability and will help improve choice, price and service for our customers. We also believe that the strategic partnership with Metro AG (Makro’s former parent) will help improve Booker Group’s sourcing capabilities.”
In the 24 weeks to September 13 group sales rose 16.5% to £2.,2bn and operating profit (before a £7m exceptional credit related to the Makro acquisition) rose 16% to £59m. Pre-tax profit, before exceptionals, was
17% ahead at £58.1m.
Regarding the cash return, Booker said that having raised £124m of shareholder equity to buy Makro last year, it had integrated the acquisition successfully and seen strong cash generation.
Chief executive Charles Wilson said: “Our plan to focus, drive and broaden Booker Group is on track. The team at Makro have settled into the group and are making a real contribution.
“Through working together Booker and Makro are improving the choice, price and service for our retail, catering and small business customers. Our Customer Satisfaction improved which helped drive non tobacco like for like sales up 5%.”
