The Investment Column: Budgens
Thursday 08 July 1999
Budgens has taken the courageous step of investing in a sector notorious for being merciless with its returns. The pounds 115m company has spent more than pounds 50m in the past couple of years to beef up its store portfolio. Last year it opened 14 Budgens supermarkets and two b2 convenience stores, acquiring a further four.
Is Budgens' investment misplaced? The group is growing slowly but surely. Last year like-for-like sales grew almost 3 per cent, and they are growing even more in the current year. Customer perceptions of value and staff friendliness are improving. The key to its success is its distribution system, in which it invested another pounds 4m last year. It can deliver to each of its stores three times a day. A dull fact, perhaps, but it took market leader Tesco over two years to develop a distribution network it was satisfied with. This year there will be another 15 Budgens refits and eight new stores. It also invested a further pounds 4m in distribution.
The shares fell from 81p to 56p last year after Budgens walked away from talks with Booker. Now it is tipped as a target for takeover by the likes of Sainsbury's. Analysts expect pre-tax profits of pounds 13.5m and earnings of 5p per share this year, putting the shares, at 66.25p, on a p/e of 13. Earnings growth will not be stunning, but Budgens, if it stays independent, should deliver stable long-term growth.
- 1 Bill Clinton portrait features Monica Lewinsky reference, artist admits
- 2 What happens to your body when you give up sugar?
- 3 Delhi bus rapist blames dead victim for attack because 'girls are responsible for rape'
- 4 Have sex with your iPad thanks to the new sex toy no-one asked for
- 5 Average penis size revealed: Scientists attempt to find what is 'normal' to reassure concerned men
Bill Clinton portrait features Monica Lewinsky reference, artist admits
Japanese island overrun with cats after population explodes
China's 'Inconvenient Truth': video exposing country’s smog crisis watched 100 million times
Delhi bus rapist blames dead victim for attack because 'girls are responsible for rape'
The 'sex selfie stick' lets you FaceTime the inside of a vagina
New theory could prove how life began and disprove God
'Jihadi John': CAGE representative storms off Sky News accusing Kay Burley of Islamophobia
This is what it's like to be dead, according to a guy who died for a bit
Durham Free School: 'Creationism taught at' free school facing closure
Ukip would cut billions from Scottish budget to fund English tax cuts
Nearly 100,000 of Britain's poorest children go hungry after parents' benefits are cut
iJobs Money & Business
£15000 - £18000 per annum: Recruitment Genius: This is a great opportunity for...
£50000 - £60000 per annum + Excellent Salary: Austen Lloyd: An outstanding new...
£20000 - £21000 per annum + uncapped commission: SThree: As a graduate you are...
£25000 - £30000 per annum + benefits: Ashdown Group: A global leader operating...