Bunzl reports growth in revenue and profit as it announces four more acquisitions

 
James Nickerson
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Bunzl us expanding into Austria and has made further acquisitions in the US and Australia (Source: Bunzl)

Bunzl has reported higher profit and revenue in the six months to the end of June, after it went on an acquisition spree.

The figures

Revenues at the outsourcer and distribution group rose seven per cent to £3.1bn in its first half, the company said this morning, while profit before income tax also jumped 11 per cent to £147.1m.

Earnings per share increased 17 per cent to 32.1p, from 27.5p in the first half of 2014.

The board also hiked its interim dividend by seven per cent to 11.75p.

Why it's interesting

The company has previously said organic growth slowed in the first half of the financial year.

However, in June Bunzl also announced its intention to buy four businesses in the US, Colombia, Canada and France, seeking to expand its global operation.

This morning, Bunzl said three safety acquisitions – Tillman, Cordova and Steiner – significantly enhanced a growing portfolio of brand products, while recent acquisition activity in Canada “creates [a] national distribution platform in cleaning and hygiene”.

The spending spree does not stop there: the company has agreed to acquire 14 businesses so far in 2015, spending £241m, which adds annualised revenue of £245m. These figures exclude Tillman, which Bunzl agreed to acquire in December 2014.

Read more: London-based outsourcer Bunzl expands into Spain and Canada

It was announced today that the group has acquired Meier Verpackungen in Austria, Steiner Industries in Chicago, Caterplus in Adelaide, and Delta Hospitality in Brisbane.

The company said through organic growth, consolidation the markets in which it competes via acquisitions, and improving efficiency, it has been able to deliver another period of growth for the group.

While there have been lower sales in France, cost reduction measures have also aided Bunzl's performance, with growth and improvement in the Netherlands, Denmark, Spain and Central Europe. Turkey and Austria, two new countries, have been entered as the company continues to grow.

The statement added: “Against the background of continued mixed macroeconomic conditions in the countries in which we operate and difficult market conditions persisting within some of the sectors we serve, I am pleased to report another good set of results at constant exchange rates.”

Read more: Bunzl a perfect fit for glove maker Tillman

While margins had declined in the rest of the world operations, due to challenging market conditions, the group reported stronger performance in Europe and North America.

Meanwhile, the group was positively impacted by currency transactions from the weakening of sterling against the American dollar, the Australian dollar, the Canadian dollar and Brazilian real.

What Bunzl said

Michael Roney, chief executive of Bunzl, 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.

In short

After a shopping spree in the first half of the year, Bunzl has reported strong growth thanks to efficiencies and new acquisitions.

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