UK wholesaler Booker today (24 May) suggested it is positioning itself for further growth in the year to come through its strategy to "focus, drive and broaden" the business.
The company posted a 27% rise in annual profits, which increased to GBP74.9m (US$117.4m) on the back of a 9.4% increase in sales.
Commenting on the results, chief executive Charles Wilson said the company had made "good progress" in the fiscal year. "Our plan to focus, drive and broaden the business remains on track," he added.
The company has looked to refresh its store base and has now converted 142 of its 172 outlets to the "Extra" format, which chairman Richard Rose described as "lighter", "brighter" and "more modern".
"The plans to broaden the business are going well," Rose emphasised.
The company has seen strong growth from its online delivery business, Booker Direct, where sales jumped 21% over the past 12 months.
Booker has also continued to make in-roads into the catering , including the launch this summer of an online sales channel, Chef Direct, specifically targeting catering customers. The company said sales to caterers increased from GBP1.11bn in 2011 to GBP1.22bn in 2012.
Meanwhile, the firm said its operations in India "continues to progress", with business centres in Mumbai and Pune "trading well".
Shore Capital analysts suggested these initiatives left Booker well-positioned to grow both profits and earnings over the coming year.
"The business continues to self-improve and expand," the analysts wrote in a note to investors. "The 172 store estate has nearly all been modernised through the 'Extra' upgrades and, like the painting of the Forth Bridge, the process of development continues. The Booker proposition has been enhanced by selective but effective acquisition and at present it is developing its Chef Direct proposition. The business in India is growing with three stores now operational... Therefore, operationally we have reasonable grounds to back up our expectation of profit and earnings growth."
In addition to top-line growth, Investec analyst Nicola Mallard emphasised the group put in a "better than expected" margin performance. During the year, Booker said its margins expanded by 17 basis points to 2.3%, which prompted Investec to raise its 2012/3 earnings guidance.
"The group reports a good start to the current year and, with a stronger than expected margin increase, we have scope to lift our FY13E assumption. We move EBIT margin from 2.33% to 2.40% and this drives a GBP2.4m (2.5%) increase in EBIT," Mallard said.
