Bunzl share price: Group updates investors on interim performance

Company unveils acquisitions in Canada and Hungary

Bunzl share price: Group updates investors on interim performance

Bunzl (LON:BNZL) has updated investors on its recent performance this morning. Separately, the company unveiled acquisitions in Canada and Hungary.

Highlights from Bunzl's statement:

Results

Against the background of challenging macroeconomic and market conditions persisting in many of the countries and sectors in which we operate, I am pleased to report another good set of results. Overall currency translation movements, principally due to the weakening of sterling against the US dollar and the euro which was partly offset by the strengthening of sterling against the Brazilian real and the Canadian dollar, increased the key reported Group growth rates at actual exchange rates by 4%.

Group revenue for the first half of 2016 increased to £3,446.8 million (2015: £3,135.2 million) and adjusted operating profit (being operating profit before customer relationship amortisation and acquisition related costs) was £235.1 million (2015: £208.4 million). Adjusted earnings per share were 46.2p (2015: 41.4p).

At constant exchange rates revenue increased 6% and adjusted operating profit rose by 9%. The Group operating margin improved from 6.6% to 6.8% at constant exchange rates, with adjusted earnings per share up 8% on the same basis.

Dividend

The Board has decided to increase the interim dividend by 11% to 13.0p. Shareholders will again have the opportunity to participate in our dividend reinvestment plan.

Acquisitions

At the beginning of February we purchased Earthwise Bag Company, a distributor of reusable bags to supermarkets and other retailers in the US, which has expanded our offering of environmentally friendly products to the grocery and retail sectors. Revenue in 2015 was £12 million. Bursa Pazari, which had revenue of £31 million in 2015, was acquired at the end of March and represents our second step in Turkey, extending our operations there into the foodservice and healthcare sectors. It is principally engaged in the sale of a variety of packaging and other foodservice supplies and disposable gloves to wholesalers, retailers and hospitals throughout Turkey and also exports to a number of countries.

At the end of May we completed three further acquisitions. Inkozell and Mo Ha Ge are both engaged in the sale of healthcare related consumables, principally incontinence products, to a variety of home end users and care homes throughout Germany. The aggregate revenue of the businesses in 2015 was £16 million. In the UK we purchased Classic Bag which develops and distributes bespoke retail packaging for non-food retailers in the UK, Hong Kong and elsewhere in Europe. It complements our existing retail supplies business in the UK, enhances our customer base and extends our presence in this market in Hong Kong. Revenue in 2015 was £7 million. Polaris Chemicals distributes cleaning & hygiene supplies to both redistributors and end users, including government and education establishments, retirement homes and cleaning companies, throughout the Brussels and Walloon regions of Belgium. The acquisition has brought additional scale to our cleaning & hygiene supplies business in Belgium. Revenue in 2015 was £3 million.

Today we are announcing three more acquisitions. The purchase in July of Plus II and Apex, which had revenue in 2015 of £16 million and £6 million respectively, have further expanded our cleaning & hygiene supplies business in Canada that has grown significantly in recent years through acquisition. Finally, the proposed purchase of Silwell, which is expected to complete in September, will provide additional scale to our business in Hungary by extending our operations there in the foodservice sector. Revenue in 2015 was £6 million.

As of 07:09 BST, Tuesday, 30 August, Bunzl plc share price is 2,420.00p.

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