Detailed Financial Analysis Report: Booker Group Plc's Activities

This report presents a financial analysis of Booker Group Plc, a major UK food retailer. It begins with a company overview, highlighting its market position and recent developments. The analysis then delves into stock market data and a five-year financial summary, providing a snapshot of the company's performance. The core of the report focuses on performance measurement, evaluating profitability, performance, and liquidity ratios. Profitability ratios, including pre-tax and after-tax profits, are examined to assess the company's ability to generate profits. Performance ratios, such as EPS, dividends, and ROCE, are analyzed to gauge operational efficiency and shareholder returns. Liquidity ratios, including current and quick ratios, are assessed to determine the company's ability to meet short-term obligations. The report concludes with a comprehensive overview of Booker Group Plc's financial health and stability based on the examined data, supported by relevant references.

“Analysis of Financial Activities- Booker Group Plc” Words: 800

Table of Contents
List of Tables...............................................................................................................................................3
1 Company Overview.............................................................................................................................4
2 Summary of Stock Market Data..........................................................................................................5
3 Summary of 5 years financials.............................................................................................................6
4 Performance Measurement..................................................................................................................8
4.1 Profitability ratios.......................................................................................................................8
4.2 Performance ratios......................................................................................................................8
4.3 Liquidity Ratios............................................................................................................................9
References.................................................................................................................................................10

List of Tables
Table 1: Press Coverage..............................................................................................................................4
Table 2: Summary of Stock Market Data....................................................................................................5
Table 3: Summary of Five years financials.................................................................................................7
Table 4: Profitability ratios..........................................................................................................................8
Table 5: Performance ratios.........................................................................................................................8
Table 6: Liquidity ratios..............................................................................................................................9

1 Company Overview
Booker Group Plc is the biggest food retailer in the UK. It is listed on the FTSE 250 index of the
country and serving the country since 1835. The company has a large customer base of around
1.5 million which is the main reason of its stability. Booker group plc has also been awarded
with the “Green Wholesaler of the Year” in 2014 which is the third for the company in
consecutive years. It has now contains 72 branches in UK having 13,000 employees. The
company has a sales target of £1.3 billion which makes it a veteran of its business. Booker Group
Plc also contains some of its own brands such as Chef’s Larder and Lichfields which is a
catering brand, Malt House Vinters and Chekov which is basically falls under wine, spirit and
tobacco brands and Happy Shopper and Euro Shopper which is the company’s own retail label.
Euro Shopper is also a licensed brand of the group until 2017 (Booker Plc, 2016).
Recent press coverage impacting positively or negatively
Table 1 show some of the examples which are related to press coverage and indicates the impact
of it on the share prices of the company.
News Article Share Price (GBP) Change (%)
Are Booker Group plc, easyJet plc and Daejan Holdings plc
set to rise by 20%+ after today’s updates? (Stephens, 2016)
166.5 (6/7/2016) +0.13%
Is It Too Late To Buy Aviva plc, Supergroup PLC And
Booker Group Plc? (Stephens, 2016a)
159.3 (14/1/2016) +0.11%
Are WM Morrison Supermarkets PLC, Boohoo.Com PLC,
Debenhams Plc, Booker Group Plc And Ocado Group PLC
Set To Soar? (Stephens, 2015)
159.9 (1/1/2015) to
186.2(2/11/2015)
+0.14%
Why I’d Buy J Sainsbury plc Over Greggs plc, Booker
Group Plc And Crawshaw Group Plc (Stephens, 2015a)
164.4 (1/1/2013) to
173.10 (15/9/2015)
+0.09%
Why You Can’t Go Wrong With Booker Group Plc,
Imperial Tobacco Group PLC, WPP PLC ORD 10P And
Talktalk Telecom Group PLC (Hargreaves, 2015)
21.5 (31/12/2007)
to 168.9
(29/6/2015)
+1.46%
Table 1: Press Coverage
In table 1, different articles are presented which have positively impact the share prices of the
Booker Group Plc. First article indicates that the Booker group is performing well in its sector

for the past years which shows the stability the company. The company will continue to grow
due to the good performance of the food sector (Stephens, 2016). Other articles emphasized that
the company is lead by the good management which is also a key growth factor. Some people
argue that it is not necessary that the company will surely perform well with the good
management. It may be a case for some companies but it is not 100% true. The share price of the
company in the UK market is increasing which is also increasing its market capital and stability.
The dividends which are provided to the shareholders are showing positive growth over since
2007 when the company resumed its operations (Hargreaves, 2015).
2 Summary of Stock Market Data
Table 2: Summary of Stock Market Data
(Source: Google Finance, 2016)

3 Summary of 5 years financials

Table 3: Summary of Five years financials
(Source: Hargreaves Lansdown, 2016)

4 Performance Measurement
Performance measurement of the company can be done by analysing various ratios which falls
under the categories of profitability, performance and liquidity. These three areas can be
evaluated by performing several ratios which is done in this case also for 5 years data extracted
in the table 3.
4.1 Profitability ratios
Profitability ratios are helpful for analysing the ability of a firm to generate the profits. The
profitability ratios for the Booker Group Plc can be analysed in the table 4.
Formula 2016 2015 2014 2013 2012
Pretax profit profit before tax/revenue 3.02% 2.92% 2.61% 2.31% 2.31%
After tax profit Net profit/Total revenue 2.56% 2.48% 2.25% 1.90% 1.90%
Profitability of Booker Group Plc
Table 4: Profitability ratios
In table 4 it can be seen that the profitability of the company is showing stable position as it is
continuously increasing. The pre-tax profit shows that in the past five years, the profit of Booker
Group has increased from 2.31%v to 3.02% in 2016 which indicates the increase of 0.71%.
Similar case can be observed for the after tax profit as the increase of 0.66% is observed in the
five years tenure of Booker Group Plc.
4.2 Performance ratios
The performance ratios of Booker Group Plc are also calculated for the period so that the
analysis can be done in a more proper way. The calculations of the performance ratios of Booker
Group Plc are indicated in the table 5 as follows.
Formula 2016 2015 2014 2013 2012
After tax profit as a % of fixed assets Net profit/Fixed assets 17.67% 17.40% 15.83% 11.38% 14.33%
EPS taken from accounts 7.24p 6.73p 6.06p 4.51p 4.83p
DPS taken from accounts 4.60p 3.66p 3.20p 2.63p 2.28p
ROCE Net operating profit/Total
assets-current liabilities
22.25% 20.94% 18.95% 15.79% 19.94%
Performance of Booker Group Plc
Table 5: Performance ratios
The first ratio which has been calculated for the evaluation of performance is after tax profit as a
percentage of fixed assets. It is showing positive growth since 2013 which indicates the stability

of the company’s operations. EPS is also growing since 2013 which is also positive for the
company as the profit on a single share is increasing. Dividend is also continuously growing as
the increase in EPS is observed. It is also good for investing purpose as the increased dividend
per share attracts investment. ROCE is increasing continuously which highlights the efficiency
of the operations because the main component of ROCE is operating profit which increases with
the efficient operations.
4.3 Liquidity Ratios
Liquidity ratios highlight the ability of a company to pay of its liabilities in the short run. The
current ratio is said to be feasible if its shows a ratio of 2:1 and quick ratio is good if the ratio
indicates 1.5:1 (Deegan, 2013). The calculations of the liquidity ratios are highlighted in table 6
as follows.
Formula 2016 2015 2014 2013 2012
Current ratio Current assets/Current
liabilities
0.95 0.99 0.98 0.87 0.85
Quick ratio Current assets-Inv/Current
liabilities
0.44 0.45 0.44 0.34 0.30
Gearing ratio Long term Liab/Capital
employed*100
14.04% 10.74% 8.67% 10.47% 17.80%
Liquidity of Booker Group Plc
Table 6: Liquidity ratios
The current ratio is the company is decreased in 2016 as compared to the previous two years
which shows the increase in liability or decrease in assets. The quick ratio is also fluctuating
which is not good for the stability of the company as it can shake the confidence of investors.
Gearing ratio is decreased as compared to the year 2012 but it is increased since 2015 which
shows that the company has borrowed significant long term liability for the continuation of
operations.

References
Booker Plc (2016). “Booker Group Plc” [Online] Available at <
http://www.bookergroup.com/about-booker/business-overview.aspx> [Accessed: 10th
December, 2016]
Deegan, C. (2013). “Financial accounting theory”. Australia: McGraw-Hill Education.
Google Finance (2016). “Booker Group Plc” [Online] Available at
<https://www.google.com/finance?q=LON%3ABOK&ei=O5FLWLmxIcjQUqv6urgM>
[Accessed: 10th December, 2016]
Hargreaves Lansdown (2016). “Booker Group Plc” [Online] Available at
<http://www.hl.co.uk/shares/shares-search-results/b/booker-group-plc-ord-gbp0.01/
financial-statements-and-reports> [Accessed: 10th December, 2016]
Hargreaves, R. (2015). “Why You Can’t Go Wrong With Booker Group Plc, Imperial Tobacco
Group PLC, WPP PLC ORD 10P And Talktalk Telecom Group PLC” [Online] Available
at < http://www.fool.co.uk/investing/2015/07/03/why-you-cant-go-wrong-with-booker-
group-plc-imperial-tobacco-group-plc-wpp-plc-ord-10p-and-talktalk-telecom-group-plc/>
[Accessed: 10th December, 2016]
Stephens, P. (2015) “Are WM Morrison Supermarkets PLC, Boohoo.Com PLC, Debenhams Plc,
Booker Group Plc And Ocado Group PLC Set To Soar?” [Online] Available at <
http://www.fool.co.uk/investing/2015/11/03/are-wm-morrison-supermarkets-plc-boohoo-
com-plc-debenhams-plc-booker-group-plc-and-ocado-group-plc-set-to-soar/> [Accessed:
10th December, 2016]
Stephens, P. (2015a). “Why I’d Buy J Sainsbury plc Over Greggs plc, Booker Group Plc And
Crawshaw Group Plc” [Online] Available at <
http://www.fool.co.uk/investing/2015/09/17/why-id-buy-j-sainsbury-plc-over-greggs-plc-
booker-group-plc-and-crawshaw-group-plc/> [Accessed: 10th December, 2016]
Stephens, P. (2016). “Are Booker Group plc, easyJet plc and Daejan Holdings plc set to rise by
20%+ after today’s updates?” [Online] Available at <

http://www.fool.co.uk/investing/2016/07/06/are-booker-group-plc-easyjet-plc-and-
daejan-holdings-plc-set-to-rise-by-20-after-todays-updates/> [Accessed: 10th December,
2016]
Stephens, P. (2016a). “Is It Too Late To Buy Aviva plc, Supergroup PLC And Booker Group
Plc?” [Online] Available at < http://www.fool.co.uk/investing/2016/01/14/is-it-too-late-
to-buy-aviva-plc-supergroup-plc-and-booker-group-plc/> [Accessed: 10th December,
2016]