Bunzl posts 11% rise in first-half profit, announces four acquisitions
Bunzl posted an 11% rise in first-half pre-tax profit as revenue grew and the distribution and outsourcing company made four acquisitions.
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For the six months ended 30 June, pre-tax profit came in at £147.1m from £132.3m, on revenue of £3.14bn, up 7% from the first half of last year.
The group operating margin was 6.6%, in line with last year, with operating margins up in Continental Europe and the UK and Ireland, and stable in North America and the rest of the world due to challenging macroeconomic conditions and some adverse foreign exchange movements.
The interim dividend, meanwhile, was lifted 7% to 11.75p.
Chief executive Michael Roney said “Bunzl has produced another good set of results due to a combination of organic revenue growth, the impact of recent acquisition activity and the continued focus on improving the efficiency of our operations. Our consistent and proven strategy has once again delivered a successful period of growth for the group.
“There has been an excellent level of acquisition activity so far this year. With a promising pipeline of opportunities and ongoing discussions taking place, we expect to complete a number of additional acquisitions during the rest of the year."
Bunzl said the committed acquisition spend year-to-date was £241m on 14 businesses, including four acquisitions announced on Monday, with entry into Turkey and Austria.
Over the period, the company acquired US-based Steiner Industries, Australia-based Bidvest Hospitality Supplies and Delta Hospitality Supplies ad Austria’s Meier Verpackungen.
Hargreaves Lansdown said the results were in line.
“Fuelled by ongoing cash generation, the group’s bolt-on acquisition led strategy continues to deliver, with resultant cost savings generated, as businesses are consolidated, remaining central,” it said.
However, it highlighted the fact that organic revenue has slowed and pointed to difficulties in the company’s emerging markets businesses such as Brazil.
“A progressive dividend policy remains enticing in the current low interest rate environment, whilst the company’s exposure to defensive arenas such as catering offers some reassurance. For now, and with the valuation arguably up with events, analyst consensus opinion currently points towards a strong hold.”
At 1047 BST, Bunzl shares were down 3.6% at 1,721p.