Bunzl targets more bolt-on deals in 2011

BUNZL, the packaging group, posted a seven per cent rise in full-year pre-tax profit yesterday and said it had up to £180m for acquisitions this year.

Bunzl, which makes carrier bags, take-away boxes and paper cups, made £276.2m pre-tax profit before amortisation and acquisition costs, while sales revenue rose four per cent to £4.8bn.

And the conglomerate, which spent £126m on nine acquisitions in 2010 and generates two-thirds of its growth from such deals, said takeover talks were ongoing with several parties to ensure there would be more in 2011. It will gain annualised revenues of £154m from its acquisitions in Belgium, Denmark, the Netherlands, Spain, Switzerland, Israel, Brazil and the US.

Chief executive Michael Roney said Bunzl’s spree marked a return to form following a slowdown during the financial crisis in 2008 and 2009.

“There is now a bit more wind at our back and while it is still quite weak it is certainly picking up,” he said. “The world environment is slowly improving.”

Bunzl saw operating profit jump 19 per cent and revenues rise four per cent in Brazil, Australia and New Zealand – but revenues fell five per cent in its UK and Ireland business. Roney said the UK market was “probably the most difficult from a macro-economic point of view” as it distributes non-food sectors that are Bunzl’s “least resilient sectors”.