Bunzl’s £300m war chest for expansion

Business supplies distributor Bunzl posted an 11 per cent rise in its first-half pre-tax profit yesterday, ahead of market expectations, and said it had over £300m available to expand into new countries through acquisitions.

FTSE-100 listed Bunzl, which supplies businesses with consumable products such as carrier bags for supermarkets and bandages for hospitals, said pretax profit rose to £138.8m, ahead of what the company said was the consensus market forecast of £132.8m.

Sales rose by 4 per cent to £2.4bn and the group’s operating margin was up 0.2 percentage points at 6.2 per cent with margin improving across all areas of the busi- ness.

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Bunzl said it had achieved strong organic growth in North America, continental Europe and its other markets across the world, partly offset by lower sales in the UK and Ireland.

Its domestic business suffered from exposure to the struggling construction sector and the public sector which has been hit by government cutbacks.

The group benefited from making seven acquisitions during the period which will add £140m to its yearly revenues.

“Our resilient business model has delivered improved organic growth and operating margins, while operating results were bolstered by a good level of acquisition activity,” chief executive Michael Roney said.

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“Looking forward, we see additional opportunities for continued development both organically and through a promising pipeline of acquisitions which should enable the group to achieve further growth,” he added.

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