Bunzl in ‘acquisition talks’ as outsourcer posts higher first-half revenues
Distribution and outsourcing giant Bunzl is in talks with “a number of acquisition targets” as it looks to accelerate growth for the rest of 2019.
The FTSE 100 firm reported a 1.6% rise in pre-tax profits to £200.5 million for the six months to June 30, while revenues were also higher.
However, Bunzl said it hopes to boost its finances for the rest of the year through “additional deals” and is currently holding “active discussions” with possible acquisition targets.
The company saw revenues for the period rise 4.3% to £4.5 billion, although this growth was only 1.2% at constant exchange rates, as it benefited from weakness in the pound.
Chief executive Frank van Zanten hailed Bunzl’s performance considering the “background of slowing macroeconomic and market conditions” across some of its regions and sectors.
He added that its “resilient” operations and “high cash conversion” allowed it to post an increased dividend, continuing a 26-year streak.
He said: “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.
“Looking forward, the group’s expectations for 2019 remain unchanged.”
The company said it has already committed to an acquisition spend of £98 million so far this year and hopes to be boosted by a further pipeline of deals.
Bunzl was significantly boosted by its continental Europe and North American divisions, which offset declines in the UK and Ireland.
Its UK and Ireland arm saw revenues slide 3.7% to £602.5 million, while operating profits in the region fell 10% to £35.6 million, after it was hit by difficult trading in hospitality and healthcare.