Derek Pain: Booker directors deserve reward for star performance
No Pain, no gain
I have on a number of occasions complained about excessive boardroom pay and perks. Particularly odious is when mediocrity or outright failure is condoned with inflated rewards. Yet success surely deserves appreciation. Unfortunately, it is not always given.
Such a churlish fate befell the directors of Booker, the star performer of the no pain, no gain portfolio. At the cash and carry group's summertime AGM some shareholders questioned the remuneration packages and at times the opposition commanded about 20 per cent of the votes. But, for once, the rebellion was misplaced as Booker emphasised again last week when it produced outstanding interim figures and seemed to indicate it was not too worried about the worsening economic climate.
When the present management arrived the group appeared to have much of its future already behind it. It had lost its share quote after being taken over at the turn of the century. But following a buyout, the newcomers engineered a stock market return via a reverse merger four years ago. Around that time the shares could be picked up for 15p or so. As I write, the price is 76.5p, capitalising the once fading group at approaching £1.2bn. The portfolio paid 24.5p a share.
Such a performance, I believe, deserves financial recognition. Just how long such a spectacular pace can be maintained must, of course, be debateable. But Booker clearly has its sights on expansion. It is still improving its chain of warehouses and has ventured into India, where it has two operations and a third on the stocks. Helped by a couple of acquisitions, it has expanded its delivery programme and I would not be surprised if further businesses are captured.
The half-time results, covering the 24 weeks to 9 September, showed sales up 8.5 per cent to £1.8bn and pre-tax profits hitting £45m, a 22 per cent increase. With cash in the bank of £58.7m (£10m at this time last year), the interim dividend is lifted 22.2 per cent to 0.33p a share. Trading in the second six months is so far running ahead of the corresponding period last year and, unless there is a dramatic slowdown, it is clear that last year's £71.4m profit will be comfortably exceeded.
We have enjoyed a spectacular run with Booker. Any reader who followed the portfolio into the stock should consider selling around half of their shares and enjoy a free ride with the remainder. The portfolio is unable to undertake such a manoeuvre.
Whereas Booker has provided a handsome return another constituent, SnackTime, the nation's third biggest vending machine group, is showing a worrying loss. Two years ago the portfolio paid 119p for shares, now worth some 65p. I suppose it could be argued that the portfolio arrived too early and should have waited until the group had become more established. It has, in the past two years, expanded by making two significant takeovers. In the present City and retailing climates it would be unwise to expect the shares to rapidly recover to their near 200p peak or, indeed, the portfolio's buying price.
Nevertheless, in a difficult market SnackTime seems to be ticking over reasonably well. In its first six months sales have grown and it has started to reap the benefits of a reorganisation and resultant cost savings. Twelve-month profits should emerge at around £1.5m with more than £2m likely next year.
Another constituent, Avation, the main market listed leasing group, now 105p against the 83.5p when recruited, has delivered its third aircraft to the Australian airline, Skywest. Under a deal between the two organisations, Avation, where Slater Investments has increased its stake to just above 5 per cent, is scheduled to supply a fleet of up to 18 new aircraft for Skywest to operate on behalf of another air service, Virgin Australia. Avation has a 51.8 per cent interest in another AIM aircraft leasing company, Capital Lease Aviation. It has six aircraft out on lease to various airlines and has just reported net profits of around £2.9m. The shares are 16.5p, pricing the company at £16.1m.
Skywest is also traded on AIM. Last week it achieved the distinction of being selected as the junior market's international company of the year. With its shares at 22p, it is valued at £44m.
- 4 Amal Clooney gives excellent response to fashion question at European Court of Human Rights
- 5 A bottle of wine a day is not bad for you and abstaining is worse than drinking, scientist claims
9 reasons Greece's experiment with the radical left is doomed to failure
'We would evict Queen from Buckingham Palace and allocate her council house,' say Greens
Greece elections: Syriza and EU on collision course after election win for left-wing party
British Muslim school children suffering a backlash of abuse following Paris attacks
British grandmother Lindsay Sandiford faces execution by firing squad in Indonesia
Liberal Democrat minister defends comments suggesting immigration causes pub closures
iJobs Money & Business
£13000 per annum: Recruitment Genius: This Pension Specialist was established ...
£23000 - £26000 per annum + Benefits: Ashdown Group: Market Research Executive...
£25000 - £35000 per annum: Recruitment Genius: A Technical Report Writer is re...
Competitive salary & benefits!: MBDA UK Ltd: MBDA UK LTD Indirect Procurement...
Day In a Page
Hibernate during winter and make your living during the summer at this busy guesthouse with panoramic sea views, in the village of Lynton
A four-bedroom penthouse next to the Tate with direct views of St Paul's from two floors of luxurious living space
A four-bedroom detached home surrounded by spacious gardens and woodland, close to New Pudsey
An 18th-century, three-bedroom home near Langstone Harbour built from ships beams with vaulted ceilings and wood burning stoves
A five-bedroom semi-detached home with a mix of period and modern features in a popular and convenient location
This five-bedroom red-brick beauty overlooks the village green and sits in just under two acres of land
A three-bedroom villa with self-contained flat, minutes from Lake Windermere
A deceptively spacious, beautifully presented Georgian home with 3000sq ft of living space and five reception rooms
A five-bedroom Victorian home with four receptions, superb gardens and paddock in Pembury
An eight-bedroom house on the south side of the The Green with cinema, wine cellars and summer house
This 17th century beauty is full of rustic cosiness, while the detached home office means you can also run a business
Four exclusive apartments in a Grade II-listed former medical school with 2,275 sq ft of living space and 18ft ceilings
A five-bedroom terraced house on the popular Peterborough Estate, ideally located for both Eel Brook Common and South Park
A state-of-the-art farm-building conversion on the former Cliveden Estate, with 11,420sq ft of internal space, cinema and wine cellar
A three-bedroom, 15th-century cottage with original features in the picturesque village of Sissinghurst
A six-bedroom terraced house with large south-facing roof terrace, cinema room and wine cellar
A new seven-bedroom home built in Queen Anne-style with swimming pool and parkland views in Mortimer
A listed, four-bedroom farmhouse in the rural hamlet of Rushall with detached barn, four acres of gardens and paddocks
A first-floor flat with two bedrooms, a spacious reception room and communal grounds in a leafy part of London
A three-bedroom flat with a spacious rootop terrace and balcony, accessed from a private gated courtyard
A Grade II-listed pile with six bedrooms, stables and 39 acres of grounds in Standlake
A two-bedroom flat with boutique hotel-style interiors, close to the foodie haunt of West End Lane
A two-bedroom flat in a beautiful old vicarage, with many original features, close to the city centre
A three-bedroom 16th-century home with an aga kitchen, private gardens and heated outdoor pool, in Hadleigh
A three-bedrom home in sought-after Queen's Gate Mews, with Italian marble-finished bathrooms
Surrounded by glorious countryside in the village of Udimore, sits this impressive four-kiln oast and barn conversion
A five-bedroom house in the picturesque village of Kettlewell, north Yorkshire
An 18th-century former coaching inn with original staircase, open fireplaces and beams throughout
A Grade II-listed Georgian town house with three bedrooms and a south-facing courtyard, near Arundel Castle
Feel on top of the world at this über chic penthouse on the 37th floor of one of Europe’s tallest blocks.
A Grade II-listed Victorian villa with six bedrooms and two further cottages, all with spectacular sea views
A grade II-listed, Georgian cottage with mature 50ft garden, perfect for summer entertaining
A magnificent Georgian pile with turrets, seven bedrooms, a heated pool and four acres of gardens
Fairoak Farm has five bedroom suites, gym, outdoor swimming pool and golf course
Chic two-bedroom river-fronted flat with a private lift that delivers you directly to your home
A spectacular seven-bedroom Tudor pile, once owned by Henry VIII, with 18 acres of land
A seven-bedroom Georgian property previously used as a picturesque wedding venue
A split-level flat in a church conversion with two en suite bedrooms and 1,200sq ft of living space
A three-bedroom bungalow situated behind an impressive stone wall, £645,000
Windsor Castle overlooks this three-bedroom Victorian cottage located on one of Windsor's smartest roads
Chapel House is a former vicarage with nine bedrooms in the beautiful Upper Wye Valley
A five-bedroom B&B and separate owner's accomodation with potential for conversion
Enjoy summer by the Thames in this two double-bedroom converted warehouse in Rotherhithe village