Headline: Bunzl Reports Robust Growth and Steady Acquisitions
The international distribution and services group Bunzl plc reported a 5.4% increase in group revenue at constant exchange rates for the quarter ending June 30, 2024. Despite a 1.2% decline in underlying revenue, the company noted an improvement in trading compared to the previous quarter, with core revenue trends showing signs of strengthening. The performance was supported by volume growth in North America, particularly in the U.S. food service redistribution business. Acquisitions also played a significant role, contributing 6.8% to growth at constant exchange rates. In real terms, the group's revenue grew by 2.0%.
For the quarter, Bunzl's operating margin met expectations, and the company maintained its positive outlook for the full year 2024. Despite a slight decline in underlying revenue, the company reaffirmed its full-year guidance, expecting strong revenue growth from acquisitions completed in 2024. Adjusted operating profit for 2024 is anticipated to show a strong increase over the previous year at constant exchange rates, with the operating margin forecasted to be moderately higher than in 2023.
The group has committed to investing approximately £700 million annually in value-enhancing acquisitions and potential capital returns through the end of 2027. Bunzl has already completed around £100 million of the £250 million share buyback program initiated in August 2024 and expects to announce further buybacks alongside its 2024 preliminary results.
Bunzl also announced the completion of several acquisitions that bolster its market position. In August, the acquisition of Cermerón in Spain was completed, followed by the acquisitions of Cubro Group and DBM Medical Group in New Zealand in September. These acquisitions expand Bunzl's healthcare offerings and strengthen its regional presence. In October, the company acquired Arrow County Holdings Limited in the UK to enhance its range of cleaning and hygiene products.
CEO Frank van Zanten expressed satisfaction with the momentum in core revenue performance and the success of this year’s acquisitions, highlighting the additions of Cubro, DBM, Cermerón, and Arrow to the company portfolio. He reaffirmed the commitment to the share buyback program and the investment strategy through 2027.