Bunzl reports higher profit as acquisitions drive growth
Bunzl has reported a higher than expected annual profit with the distribution giant benefiting from a string of acquisitions, although growth in organic revenue slowed in North America, its largest market.
Bunzl had warned last year that organic growth was slowing, and said this morning that sales from its grocery and retail business in North America was hit by weakening demand in the region.
The distributor, which bought three companies in 2019, also announced that it had purchased Brazillian healthcare products distributor Medcorp in January, and has entered a deal to buy ICM, a Danish firm that distributes personal protection equipment.
Bunzl said its adjusted pre-tax profit rose to £579.1m, a rise of 2.4 per cent at constant currency rates on a consistent IAS 17 basis. Analysts polled by the company had on average been expecting the figure to be £564.4m.
Bunzl reported an operating profit of £528.4m for 2019, and a profit before income tax of £453.3m.
Basic earnings per share rose from 98.4p to 104.8p, and it announced an annual dividend of 51.3p.
“Against the background of mixed macroeconomic and market conditions which prevailed during 2019 across the countries and sectors in which we operate, I am pleased to report that Bunzl has produced another resilient performance with an increase in operating margin,” said chief executive Frank van Zanten.
He said that the company continued to see challenging trading conditions in many of its markets, but said he was optimistic that more acquisitions would help improve Bunzl’s growth.
Bunzl shares rose as much as 1.64 per cent in morning trading.