Bunzl posts stronger than expected profit & revenue in the fiscal first half.

Bunzl plc (LON: BNZL) said on Monday that its profit and revenue in the first six months of the current fiscal year came in stronger than what the experts had forecast. Following the hawkish performance, the company’s board decided in favour of reinstating dividend payments.

Shares of the company opened only 0.5% up on Monday but jumped more than 3% in the next hour. Bunzl is now exchanging hands at £25 per share that translates to its year to high. Its current per-share price also marks an almost 100% gain compared to its low £12.77 per share in March due to COVID-19 restrictions. The stock had started the year 2020 at around $21 per share. Have money to invest? Here’s what you need to know about trading stocks online.

Bunzl to acquire MCR Safety and Abco Kovex

Bunzl said that demand for gloves and protective masks remained strong in the fiscal first half due to the Coronavirus pandemic that has so far infected more than 325 thousand people in the United Kingdom and caused over 41 thousand deaths.

The distribution and outsourcing firm also revealed plans of acquiring the American PPE (personal protective equipment) company, MCR Safety, and Ireland-based packaging distributor, Abco Kovex, on Monday. The agreements with the two companies, it added, have already been finalised.

At £306.8 million, Bunzl reported a 16.6% annualised growth in its H1 adjusted pre-tax profit. In terms of revenue in the fiscal first half, the British multinational registered £4.85 billion that marks a 6.7% growth as compared to the same period last year.

As per the company-compiled consensus, Bunzl was expected to print £4.80 billion of revenue in the first half and £296 million of adjusted pre-tax profit; both of which are lower than the actual figures on Monday.

The London-based company declared 35.8 pence of additional interim dividend per share for 2019. For 2020, it announced 15.8 pence a share of interim dividend on Monday. Bunzl had originally suspended its final dividend earlier this year in April.

Owing to the COVID-19 lockdown in April, Bunzl reported significantly higher demand for grocery, cleaning and hygiene, and healthcare products at large. Its retail business and food service that makes up 35% of its total business, however, were severely under pressure.

At the time of writing, Bunzl is valued at £8.42 billion and has a price to earnings ratio of 23.92.