On Thursday, Bunzl (OTC:BZLFY) plc, a specialist international distribution and services group, reported a 5.4% increase in group revenue at constant exchange rates for the quarter since June 30, 2024. Despite a 1.2% decline in underlying revenue, the company noted an improvement in trading compared to the previous quarter, with underlying revenue trends showing signs of strengthening. The company’s performance was bolstered by volume growth in North America, particularly in the US foodservice redistribution business. Acquisitions have also played a significant role, contributing 6.8% to the growth at constant exchange rates. At actual exchange rates, the group's revenue grew by 2.0%.
Bunzl's operating margin for the quarter met expectations, maintaining a positive outlook for the full year of 2024. The company reaffirmed its full-year guidance, anticipating robust revenue growth driven by acquisitions completed in 2024, despite a slight decrease in underlying revenue. Adjusted operating profit for 2024 is expected to show a strong increase from the previous year at constant exchange rates, with the operating margin predicted to be moderately higher than in 2023.
The group has committed approximately £700 million annually until the end of 2027 for investments in value-accretive acquisitions and potential returns of capital. Bunzl has already executed about £100 million of its £250 million share buyback program initiated in August 2024 and expects to announce a further buyback in conjunction with its 2024 preliminary results.
Bunzl also announced the completion of several acquisitions that enhance its market position. In August, the acquisition of Cermerón in Spain was completed, followed by the acquisitions of Cubro Group and DBM Medical Group in New Zealand in September. These acquisitions expand Bunzl's healthcare offerings and strengthen its regional presence. In October, the company acquired Arrow County Holdings Limited in the UK, enhancing its cleaning and hygiene product range.
CEO Frank van Zanten commented on the company's growth and acquisition strategy, expressing satisfaction with the continued momentum in underlying revenue performance and the success of this year's acquisitions. He highlighted the addition of Cubro, DBM, Cermerón, and Arrow to the company's portfolio and reaffirmed the commitment to the share buyback program and investment strategy through 2027.
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