Bunzl acquires two businesses in buying spree

DISTRIBUTION firm Bunzl continued to blaze the acquisition trail yesterday, buying two businesses in Canada and Australia, as it said trading was in line with expectations.

The FTSE 100 firm announced yesterday that it was to acquire Canadian glove distributor McCordick Glove & Safety and Australian medical supplier Atlas Health Care in a deal thought to be worth over £30m.

Bunzl has announced nine acquisitions in the year to date, with annualised revenue from 2012 of around £210m. It added that the current environment for acquisitions remained “positive”.

Revenue growth for the year to December is expected to be around six per cent, Bunzl said in a pre-close statement yesterday. Underlying revenue growth for the year is expected to be around 2.5 per cent.

“Bunzl’s strong cash flow and balance sheet should continue to enable the company to take advantage of opportunities to consolidate further the markets in which it competes and increase shareholder value,” it said yesterday.

The City was not cheered by the statement though, and Bunzl was the biggest faller on the blue chip index yesterday.

Caroline de la Soujeole, industrial goods and services analyst at Seymour Pierce, said the results were “a touch below our expectations”.

“Trading in the fourth quarter of 2012 was lighter than we anticipated,” she said, downgrading the stock from “hold” to “reduce”.

Bunzl closed down 4.32 per cent at 1,020p yesterday as analysts reduced their earnings estimates.