Booker sales leap as group waits on Makro

Booker, which has 172 branches and supplies nearly half a million businesses including corner shops, pubs and restaurants, said underlying sales increased 4.4 per cent in the 12 weeks to September 14.

This was up from 1.7 per cent in the previous quarter, driven by strong growth in tobacco sales and a good performance from its cash-and-carry and delivery arms.

But while the firm has defied the economic gloom, the Makro wholesale business it bought in July continued to find trading challenging over the past 10 weeks.

German-owned Makro UK, which has 30 sites and more than one million customers, was bought by Booker in a cash and shares deal valuing it at £139.7m, but it is being held as an investment until the deal is cleared by the Office of Fair Trading.

Booker chief executive Charles Wilson said: “We are confident that once we have clearance from the competition authorities, Booker and Makro will be able to improve choice, prices and service for the caterers, retailers and small business in the UK.

“Makro will prove a good addition to the Booker Group.”

Booker has been revived by former Marks & Spencer director Mr Wilson, who has returned the business to profit since taking over in 2005.

The company has also benefited from the growing trend of people shopping more locally amid high fuel prices, which has boosted its convenience store customers.

Booker, which also supplies M&S, HMV, WHSmith’s shops in transport hubs and Odeon cinemas, said its recently acquired businesses – speciality foods operation Ritter Courivaud and drinks wholesaler Classic – performed well in the most recent period.

Shore Capital analyst Clive Black said: “Booker has delivered another very robust trading performance set against the backdrop of a poor UK consumer economy.

“Booker awaits the outcome of the OFT competition review into its proposed acquisition of Makro. Such a review is always hard to pre-judge albeit we would expect the majority if not all of the of transaction to proceed as planned. This process prevents the commencement of formal integration, which is a frustration of sorts but has to be done.”