LONDON -- Booker Group (LSE: BOK.L ) reported a 4.3% increase in sales through the first half of its fiscal year thanks to a recovery in tobacco sales, which were up 5.1% from a year ago after declining 1.7% in the company's first quarter.
Life is apparently a little easier selling to the people who sell to you and me. While retailers like Tesco, Sainsbury's, and Morrison's fight each other for every stretched consumer's pound, Booker appears to be getting on well, as management reported good first halves for both the wholesale and direct operations. The new Chef Direct business, which targets caterers and restaurants, also reported good progress in its first nine months of operation.
It remains to be seen if Booker will be successful in turning around recent acquisition Makro (assuming regulators allow the transaction to go through), a wholesaler with a significantly broader product offering than Booker's formerly owned by Germany's Metro. As management points out, the company has been struggling for the past several years and the most recent trading period wasn't any better.
In a tough consumer environment, these results are reassuring, but with a price-to-earnings ratio over 20 and a potentially challenging merger to navigate, it might not be the best time for investors to be looking to buy Booker's shares.
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