Specialist distribution group Bunzl has upgraded its operating profit guidance following a string of successful acquisitions.
The FTSE 100 company, which sells global businesses a wide range of products from coffee cups to cafes, food wraps to supermarkets, and cleaning materials to hospitals, said it “now expects to deliver robust revenue growth in 2024” in its pre-close statement published today.
Bunzl said its improved outlook was driven by good margin management, including “increased own brand penetration” and acquisitions, which totalled more than £600m so far this year.
The group’s acquisitions have included RCL Implantes, a Brazilian distributor specialising in surgical and medical devices with a revenue of BRL112m (£18m) in 2023 and Clean Spot, a distributor of cleaning and hygiene products and equipment in Canada which generated revenue of CAD7m (£4m).
Bunzl’s group operating margin for the first half of 2024 is expected to show “a strong improvement” compared to the first half of 2023, resulting in robust adjusted operating profit growth at constant exchange rates.
Group revenues however declined slightly by three to four per cent overall at actual exchange rates while organic revenue adjusted for trading days is expected to decline by around five per cent driven by “volume reductions and deflation in the US business”.
Bunzl CEO Frank van Zanten said: “Our agile and entrepreneurial teams continue to deliver robust profit growth.
“I am delighted with the ongoing successful margin management, including increasing penetration of own brands, demonstrated across the group, allowing us to upgrade our full year profit outlook today.
“I am also pleased to welcome two more businesses to the Bunzl family, taking our total committed spend on acquisitions to around £600m so far this year.
“After an excellent start to the year for acquisitions, we maintain a strong balance sheet, providing us with significant optionality to continue to self-fund value-accretive acquisitions and our pipeline remains active.”