DISTRIBUTION and outsourcing group Bunzl yesterday said trading in the first half of the year was boosted by acquisitions, favourable currency movements and strong revenue growth in the US, placing it on target to meet full year expectations.
Bunzl has made five acquisitions so far this year, contributing a combined annualised revenue of £85m. The company said it expects to finalise more transactions before the year is out as it utilises the continuing weak economic environment to scour the market for opportunities.
Bunzl expects group revenue growth to come in at around two per cent for the full year, with group profitability helped along by the positive effects of cost reduction activities and favourable foreign exchange rates on group margins.
Andy Murphy, an analyst at Singer Capital Markets, said: “Bunzl is a very highly regarded FTSE 100 constituent that is arguably a relatively defensive company given its product and client exposure. Although it may not have the beta of other cyclical companies, it is unlikely to disappoint.”
Bunzl said its North American operations had continued to demonstrate strong underlying revenue growth, driven primarily by existing customers doing more business with the firm.
Trading in continental Europe was boosted by the recent acquisitions. Revenues in the UK and Ireland fell year-on-year due to “persisting difficult economic conditions”, the group admitted, though it said profits had increased due to improved operating margins.
Bunzl added that its activities in the rest of the world had shown “excellent” growth due to positive currency translation, strong underlying growth in Brazil and margin improvement in Australasia.