The Share Centre tips cash and carry operator Booker

9th September 2013

Stockbroker The Share Centre is tipping cash and carry operator Booker as a stock investors may want to snap up writes Philip Scott.

The FTSE 250 listed business has more than 170 branches across the UK and offers branded and private-label goods to the likes of convenience stores, grocers, pubs and restaurants. Booker has delivered a strong performance since the new management took over and its £140m deal with fellow wholesaler Makro deal provides a good growth opportunity for the group.

Over the past 12 months it has seen its share price rally by 39% and Graham Spooner, investment research analyst at The Share Centre, believes there is more to come. The latest update reported good progress as it delivers its strategy to “focus, drive and broaden” its business and it is on track to meet full year expectations. The company’s expansion into India also appears to be progressing positively following the opening of its fourth branch in the region and it expects to open another two later in 2013.

Spooner says: “Synergies between Booker and Makro should improve profitability and a slide in underlying agricultural commodities should help profit margin growth ahead. Hikes in the dividend over recent reporting periods also bode well for investors seeking income.”

The broker sentiment on markets and shares website Digital Look, is also upbeat towards the company, with the consensus pointing to a ‘strong buy’.

Spooner adds: “We continue to believe that the long-term fundamental for Booker looks sound and it offers growth seeking investors an opportunity in the Food and Drug sector. The deal to take over the UK Makro operation and expand its consumer base and product range is attractive for investors although they should be aware it will take time to implement any changes.”

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