Bunzl Shares Experience Decline

At 0953 GMT, Bunzl shares took a hit, decreasing by 4.8% to 3,146 pence. Despite this recent drop, the shares have seen a 4.4% increase over the past year.

Revenue and Operating Margin Guidance

Bunzl, a London-listed distribution-and-outsourcing group, provided a cautious outlook for the current year. The company anticipates a decrease in underlying revenue and operating margin compared to last year. The decline is attributed to a slower-than-expected start to trading in North America.

Factors Impacting Revenue

A significant portion of Bunzl's revenue comes from North America, which experienced a decline from £7.37 billion to £6.97 billion. This drop is primarily due to volume weakness in the foodservice redistribution business, decreased retail revenue from planned strategic actions, and a reduction in Covid-19 related product sales. However, there was a slight benefit from product cost inflation in the base business.

Growth Drivers

Despite these challenges, Bunzl highlighted organic growth stemming from new business opportunities created by acquisitions, ongoing product innovation efforts, and the company's sustainability expertise. In the previous year, Bunzl completed 19 acquisitions, with two additional acquisitions announced just recently.

Conclusion

While the current forecast points towards a tough year ahead for Bunzl, the company remains optimistic about its long-term growth prospects driven by strategic initiatives and expansion efforts.

Bunzl Reports Increase in Pretax Profit and Dividend for 2023

Overview

Bunzl has announced a pretax profit of GBP698.6 million for the year ending Dec. 31, up from GBP634.6 million the previous year. Adjusted pretax profit, which excludes exceptional items, reached GBP853.7 million, surpassing consensus expectations of GBP799.9 million. However, revenue dipped to GBP11.80 billion from GBP12.04 billion, despite Visible Alpha's consensus of GBP11.84 billion.

Financial Performance

The company saw a 2.5% revenue growth from acquisitions, partly offset by a 1.5% revenue decrease due to a disposal in 2022. Operating margin rose to 8.0% from 7.4%, with specific growth in North America to 7.6% from 6.9%. Bunzl is proposing a final dividend of 50.1 pence per share, resulting in a total dividend of 68.3 pence for the year, marking an 8.9% increase from 2022.

CEO Statement

Chief Executive Frank van Zanten highlighted Bunzl's consistent and compounding business model that drives growth and resilience. He emphasized the company's progress in recent years and its strong financial position as foundations for expanding market share, consolidating markets, and maintaining a successful record of creating long-term sustainable value.