Outsourcing group Bunzl expects its continued acquisitions spree to drive growth over the next six months, but said its underlying revenue for the first six months will likely remain ‘broadly flat’.
The group said it is expecting its revenue to increase year-on-year by 4-5 per cent at actual exchange rates, and to grow by one per cent at constant rates.
Shares tumbled over three per cent and toward the bottom of the FTSE 100 during opening exchanges today, signalling investors aren’t convinced about the companies’ aggressive acquisition strategy to drive up growth.
However, it added that underlying revenue growth for the first six months of the year, which will be announced on 30 June, is “expected to broadly flat”.
This comes after the London-based FTSE 100 firm said it had struck two deals to buy Leal Equipamentos de Proteção, a specialised safety distributor in Brazil, and Irudek, a safety and personal protective equipment maker based in Spain.
In the latest acquisition, the Group announces today it has bought EHM, a distributor of a PPE products in the UK.
In a market update before its closed period for the next six months, tt warned that its revenue in north America is expected to decline due to the volume weakness in its foodservice sector, and due to inflation.
Frank van Zanten, chief executive of Bunzl, said: “Bunzl continues to demonstrate resilience, with our operating margin over the first six months of the year expected to remain well ahead of historical levels and driving an upgrade to our full year expectations.
“Our acquisition momentum remains strong, with the acquisition of EHM, announced today, enhancing our safety offering in the UK. Year-to-date we have announced six acquisitions, including Bunzl’s 200th since 2004, with our pipeline remaining active and supported by a strong balance sheet.