Bunzl forecasts a 9% annualised growth in full-year revenue

Bunzl plc (LON: BNZL) expressed confidence on Wednesday that its financial performance in fiscal 2020 will remain upbeat as the Coronavirus pandemic continued to fuel orders in the fourth quarter. The company also said that it had completed Snelling acquisition but did not disclose the value of the deal.

The COVID-19 crisis has so far infected more than 1.8 million people in the United Kingdom and caused a little under 65 thousand deaths. Last week, JP Morgan downgraded Bunzl from “overweight” to “neutral”.

Bunzl expects its revenue in fiscal 2021 to take a hit

Bunzl said that it expects its full-year revenue to come in roughly 9% up (constant exchange rates). In fiscal 2019, the distribution and outsourcing company had posted £9.33 billion of revenue. The London-listed company highlighted that sales for several of its products took a hit this year. But a sharply higher demand for masks, gloves, disinfectants, and sanitizers helped offset the decline.

In comparison, Bunzl had registered an 8.8% annualised growth in its third-quarter revenue at constant exchange rates, as per the report published in October.

The British multinational recently acquired Snelling – a Dallas-headquartered company that sells industrial and food-service packaging, along with cleaning and hygiene products. Snelling had recorded £27.93 million of revenue in fiscal 2019.

Bunzl acknowledged the uncertainty associated with the COVID-19 crisis in the upcoming months that it said made it difficult to give meaningful guidance for the future at this stage. It, however, forecasts its fiscal 2021 revenue to come in lower than the previous year. Bunzl also forecasts operating margin to recover to historical levels in 2021.

Bunzl plc performance in the stock market

Bunzl shares tanked about 1.5% in premarket trading on Wednesday and lost another 4% on market open. Including the price action, the stock is now exchanging hands at £23.56 per share versus a significantly lower £12.77 per share in March due to the COVID-19 disruptions.

The London-based company had started the year at a per-share price of £20.92. The price action should come in handy if you are interested in investing in the stock market online.

Bunzl performed fairly downbeat in the stock market last year with an annual decline of more than 10%. At the time of writing, the British multinational distribution and outsourcing company is valued at £7.95 billion and has a price to earnings ratio of 20.76.