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Bunzl share price edges lower despite modest growth in H1 pre-tax profit

Bunzl Plc (LON:BNZL) has posted modest increases in half-year revenue and profit, thanks to the weaker pound.

The FTSE 100 distribution and outsourcing giant earlier today published its financial report for the six months ended June 30. The report showed that Bunzl’s first-half revenue came in at £4.5 billion, which was up 4.3% from the corresponding period a year earlier. Meanwhile, the company’s adjusted pre-tax profit was £264.2 million, 2.7% higher than a year ago.

The company’s growth notably benefited from a weakness in the British pound. At constant exchange rates, Bunzl’s revenue and profit increased by 1.2% and 0.8%, respectively.

Bunzl’s chief executive officer Frank van Zanten commented on the results and indicated that the company expected to meet its 2019 estimates.

“Against the background of slowing macroeconomic and market conditions across the countries and sectors in which we operate, Bunzl has produced a resilient operating performance with high cash conversion and an increased dividend,” van Zanten said in a statement. “Looking forward, the Group’s expectations for 2019 remain unchanged.  Despite continuing economic uncertainties, the Board believes that the combination of our strong competitive position, diversified and resilient businesses and ability to consolidate our fragmented markets will lead to further progress.”

The CEO also revealed that the company was in discussions with a number of acquisition targets “which we anticipate will result in additional deals during the remainder of the year”.

Bunzl’s performance in the UK and Ireland took a hit during the first six months, with revenue and adjusted operating profit falling by 3.7% and 10.3% respectively. The company cited weaker performance in safety and difficult trading conditions in hospitality and healthcare as the main reasons for the declines. However, the firm’s strong performance in North America and continental Europe more than offset those dips.

In today’s trading, the Bunzl share price stood at 2,027.00 GBX, as of 16:35 BST. At this price level, the company’s shares were down 0.3% for the day.

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