Booker shareholders to carry off an extra cash payout

Booker, the food wholesaler, is to return £60m to shareholders - underlining its turnround from a heavily indebted company to a cash-rich group over the past eight years.

Shares in the company - which operates Britain's largest cash and carry chain by sales - touched a fresh high of 145p on Thursday, before closing at 141.4p. In 2007, the share price hit a low of 22p.

As of September 13 this year, Booker had 123.4m of net cash, up from £69.8m a year earlier. Eight years ago, the company had £361m of net debt.

This improvement in net cash over the past year came after Booker put £15.8m of its cash towards the £150m it paid to acquire rival wholesaler Makro UK in May 2012.

Charles Wilson, chief executive, said he had indicated to shareholders at the time of the Makro deal - which involved the issue of £124m of shares - that he hoped to stabilise and improve the acquired business. "They were expecting that we would be getting cash back to them," he said. "Its really great to be saying we are already at £60m." Booker will consult with shareholders on the precise mechanism for the special cash return, with one option being the payment of a special dividend.

Mr Wilson added that Booker aimed to keep generating cash, by keeping tight control over working capital and capital expenditure.

"We are expecting that the group will continue to improve its cash position [and we will be] looking to return that back to shareholders, whether by dividends or otherwise,," he said.

His announcement of the cash return came as Booker increased pre-tax profit from £46.6m to £65.1m, in the six months to September 13, including a £7m exceptional gain from the acquisition of Makro. Excluding exceptional items, pre-tax profit rose 17 per cent to £58.1m.

Sales rose 16.5 per cent to £2.22bn over the period, helped by the integration of Makro in April.

Booker has also begun trialling two smaller discount stores, owned and run by independent retailers but supplied and supported by Booker.

Mr Wilson said Booker aimed to add another six discount convenience stores by the end of its financial year in March. If the trial proves successful, the group intends to expand the format further.

However, Mr Wilson did not comment on how large a discount convenience store estate might become. Booker is planning smaller units than those operated by so-called hard discounters, Aldi and Lidl, in more neighbourhood locations, such as council estates.

An interim dividend of 0.45p (up from 0.38p) will be paid from diluted earnings per share of 3.05p. (2.26p).

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