Investec lifts Booker target on strong results and Londis/Budgens deal
Investec has lifted its target price for Booker at the food wholesaler's annual results beat forecasts, saying that the proposed acquisition of Londis and Budgens represents a "strong fit" to the business.
Booker Group
224.00p
16:40 02/03/18
Food & Drug Retailers
4,008.42
11:25 03/05/24
FTSE 250
20,073.17
11:25 03/05/24
FTSE 350
4,512.09
11:25 03/05/24
FTSE All-Share
4,465.45
11:25 03/05/24
The broker raised its profit forecasts for the next two years and reiterated its 'buy' recommendation on the stock.
Booker delivered a 17% increase in profits for the year to 31 March to £138.8m, slightly ahead of Investec's £136m estimate due to better-than-expected margins.
Revenues, already reported, only inched higher to £4.75bn from £4.73bn.
"The top line environment remains challenging, but the group will keep tight control of costs and we feel there is scope to increase our forecasts on this basis," Investec said.
If cleared by regulators, the broker said that the £40m deal to buy the Musgrave Group, which owns the Londis and Budgens chain of convenience stores, "would significant extend the group's symbol outlet network and enhance its delivery capability".
The shares were nearly 10% higher at 167.11p by 10:50.