City takes fright at pounds 23m Booker charge

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The Independent Online
BOOKER, the debt-laden cash-and-carry business, is cutting 600 jobs and taking an exceptional charge of pounds 23m as part of a deal to sell its food distribution division. The company is selling Booker Wholesale Foods (BWF) to food wholesaler Palmer & Harvey for a knock-down pounds 4.4m as it strives to reduce its pounds 650m debt mountain.

The jobs will be lost at the division's head office and call centre in Northampton, which are being closed, as well as at the frozen food operations in Hartfield, Haydock and Bristol.

More job losses are expected at Booker as the group is restructured under Stuart Rose, who joined as chief executive late last year. The company has announced more than 200 other job cuts in the past few months.

There was further bad news in the sector yesterday when Hazlewood Foods, the chilled foods group, announced 250 job cuts after a decision to stop meat and delicatessen manufacturing at its loss-making plant in Wisbech, Cambridgeshire.

Mr Rose said the sale of BWF, which distributes food orders to corner shops and independent retailers, was needed to reduce debt and trim the business to its core chain of 181 cash-and-carry centres. BWF recorded losses of pounds 1m on sales of pounds 225m last year.

Also for sale is Booker Food Service, the catering supplies division that services clients such as Burger King, hospitals and the armed forces.

Commenting on the plan to revitalise Booker, Mr Rose said: "If it doesn't work then I'm out of a job. But I've appointed one new director, another is joining next month and I'll be beefing up the management elsewhere in the business."

Booker shares fell 7.5p to 64.5p on the news. Analysts said the market took fright at the exceptional cost, one noting there was "quite a lot of pain to come" before the company completed its transformation.

The shares plunged last year on three profit warnings and abortive merger talks with Somerfield and Budgens.