Booker Says Merger With Tesco To Be Completed Late 2017/Early 2018
UK wholesaler Booker has said that its planned merger with retail giant Tesco should be completed ‘in late 2017 / early 2018, subject to, amongst other things, the necessary shareholder approvals’.
Ahead of the merger, the wholesaler has posted a 0.5% increase in like-for-like sales for the full year to 24 March.
This was comprised of a 2.6% increase in non-tobacco sales and a 4.6% decline in tobacco sales, the company said.
Sales stood at £5.3 billion for the year, while profit before tax was up 15% to £174 million. Like-for-like sales to retailers were down marginally (-0.6%), while sales to caterers were up 4.4%.
A Good Year
"Booker Group had another good year,” commented chief executive Charles Wilson (pictured). “Our plan to Focus, Drive and Broaden the business remains on track. Customer satisfaction was strong and sales and profits were the best we have ever achieved.”
The company said that its Booker Direct, Ritter-Courivaud and Chef Direct ‘had a good year’, while its Premier, Family Shopper, Budgens and Londis retail banners are ‘working well’.
On the Tesco merger, Booker stated that the combination of the two businesses ‘should improve choice, quality, prices and service for the UK consumer. It should also help the Booker catering, retail and small business customer prosper in a challenging market.’
It added that during the merger process, Booker will ‘ensure it is “Business as Usual”. We are excited by the opportunities the merger creates for consumers, our customers, suppliers, colleagues and shareholders’.
Commenting on its results, Clive Black of Shore Capital said, "Will this be the last set of full year results to be released by Booker? If its Board has its way then it most certainly will be as the group seeks to 'merge' with the UK's largest grocer, Tesco# (TSCO, Hold at 182p). As expected, Booker has delivered another great set of results, Charles Wilson remaining a business hero, with another special distribution in-tow.
"Whilst so, the proposed merger with Tesco is now in the hands of the UK CMA, an unpredictable organisation. If remedies are too great or the deal is refused clearance then there is considerable downside risk for Booker’s stock to us."
© 2017 European Supermarket Magazine – your source for the latest retail news. Article by Stephen Wynne-Jones. Click subscribe to sign up to ESM: The European Supermarket Magazine.