Bunzl boosts profit on strong coronavirus protective equipment demand
UK distribution business Bunzl today said it had boosted revenue and profit in the first half of the year and said it had agreed to buy businesses in Ireland and the US.
Bunzl said it grew operating profit 16.9 per cent to £279.4m and revenue seven per cent to £4.8bn in the six months to 30 June.
Bunzl said the coronavirus pandemic had stimulated demand for its protective equipment such as masks, sanitisers, gloves, disinfectants, coveralls, disposables wipes, face shields and eye protection
Bunzl’s share price rose nearly four per cent to 2,497p this morning.
The company reinstated its 2019 final dividend which it suspended due to to the covid pandemic.
Bunzl today said it would pay the dividend at the same level as originally proposed (35.8p) because of its strong performance.
It also upped its interim dividend 1.6 per cent to 15.8p compared to the same period last year.
Frank van Zanten, chief executive of Bunzl, said: “Despite the unprecedented challenges experienced as a result of the covid-19 pandemic during the first half of the year, these results have once again demonstrated the strength of our customer proposition and supply chain and the resilience of our business model and consistent and proven strategy.”
Looking forward van Zanten said: “Although there remains considerable uncertainty, we expect to face challenging trading conditions during the second half of the year. However the fundamental aspects of our business model remain attractive with the group’s strong cash generation allowing us to maintain Bunzl’s long track record of dividend growth and continue our compounding strategy of consolidating the group’s fragmented markets through focused acquisitions.”
The company said today it had agreed to acquire $248m (£189m) US safety business MCR Safety which supplies gloves, eye protection and workwear.
Bunzl also said it had agreed to acquire Irish flexible packaging business Abco Kovex which had a 2019 revenue of €23m (£20.7m).