Bunzl share price tumbles as revenue growth slows

Shares in Bunzl (LON:BNZL) have fallen deep into the red in London in today’s session, as the support services group revealed that its revenue growth had slowed in the first three months of the year. The company pointed to mixed macroeconomic and market conditions across the countries in which it operates.

As of 09:26 BST, the Bunzl share price had given up 10.04 percent to 2,295.00p, weighing on the blue-chip FTSE 100 index which currently stands 0.09 percent lower at 7,463.28 points. The group’s shares have added a little more than six percent to their value over the past year, as compared with about a three-percent gain in the Footsie.

Bunzl share price down after Q1 results

Shares in Bunzl came under pressure as the company disclosed that its revenue in the first quarter had increased 2.5 percent at constant exchange rates. The support services group explained that revenue growth had slowed during the quarter due to mixed macroeconomic and market conditions, most notably in North America where Bunzl’s business experienced slower underlying growth of approximately one percent as a result of slightly lower sales to customers in the grocery and retail sectors.

The FTSE 100 company further announced that  has recently acquired Coolpack, a distributor based in the Netherlands principally engaged in the supply of specialist packaging to supermarkets and the pharmaceutical, food processor and foodservice sectors, with revenue of €4 million last year. Bunzl explained that growth through acquisitions constituted an important part of its strategy and that it expects to complete further deals this year.

Analysts on blue-chip support services group

The 13 analysts offering 12-month price targets for Bunzl for the Financial Times have a median target of 2,630.00p on the shares, with a high estimate of 2,850.00p and a low estimate of 1,800.00p. As of April 12, the consensus forecast amongst 14 polled investment analysts covering the blue-chip group advises investors to hold their position in the company.