Booker tells tale of bad debt threat

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The Independent Online
BOOKER, the agri-business and food distribution group, fears it may be lumbered with unpaid bills as more restaurants, caterers, hotels and other small firms that it supplies go under.

A 36 per cent hike in its bad-debt provision, which now stands at pounds 8.4m, was responsible for the slide in pre-tax profits from a restated pounds 32.9m to pounds 32.6m for the 24 weeks to 13 June.

Jonathan Taylor, chief executive, said: 'We do have a vulnerable group of customers and we don't want to be caught out with bad debts which we haven't provided for.

'We're not tightening our credit terms but we are watching like a hawk for any customer going overdue or going over their credit limits.'

Booker was also hit by the fall in the dollar, which reduced its American profits contribution by pounds 1.6m, and a continuing 'difficult trading environment'.

Investors were disappointed by the results. The shares fell 22p to 325p in a rising market. Some analysts are expected to reduce their full-year profits forecasts.

Earnings per share slipped from 11.56p to 11.34p but the interim dividend was held at 7.5p. Mr Taylor said that there was no sign of an end to the recession.

The group axed 750 jobs in the first half and Mr Taylor warned there would be more job cuts in the second half: one or two food depots in the UK would be closed and some US hatcheries would be rationalised.

Of the three main divisions, only fish and prepared foods lifted pre-tax profits - from pounds 7.1m to pounds 9.1m. Food distribution made pounds 12.7m as against pounds 15.5m.

Agri-business, which produces breeder chickens, fell from pounds 9.7m to pounds 9.4m. One promising sign was the recovery in the salmon market, which had been devastated by Norwegian imports.

Mr Taylor said the group would continue to sponsor the Booker literary prize, which costs about pounds 75,000 a year. Booker receives about pounds 2m a year in income from copyrights on works by Agatha Christie, Ian Fleming and others.