Food packaging and hygienic clothing distributor
Moreover, Bunzl's operating margin rose 20 basis points to 6.6 per cent and cash generation remains strong. Free cash flow rose £101m to £275m, which allowed the group to fund £185m-worth of acquisitions and to bolster the dividend. Acquisitions also helped continental European sales to rise 12 per cent in the year to £1.1bn, while the North American business grew sales 7 per cent to £2.7bn, helped by new business wins - particularly in grocery. Still, a tough trading environment in UK and Ireland meant sales there slipped 1 per cent to £997m. Although, despite the uncertain economic backdrop, chief executive Michael Roney thinks Bunzl's "resilient business model" and "promising acquisition pipeline" should continue to deliver growth.
Broker Panmure Gordon upgraded forecast EPS for 2012 by 4 per cent to 70.46p (68.5p in 2011).
| BUNZL (BNZL) | ||||
|---|---|---|---|---|
| ORD PRICE: | 946p | MARKET VALUE: | £3.1bn | |
| TOUCH: | 943-946p | 12-MONTH HIGH: | 951p | LOW: 651p |
| DIVIDEND YIELD: | 2.8% | PE RATIO: | 25 | |
| NET ASSET VALUE: | 244p* | NET DEBT: | 81% | |
IC VIEW
Bunzl's focus on supplying food and grocery markets leaves it resiliently placed, while a stream of bolt-on acquisitions have helped bolster overall growth. But, after rising 14 per cent in the past three months, the shares now trade on a not so cheap 13 times expected earnings - leaving its prospects looking factored-in. Hold.
Last IC view: Good value, 767p, 30 August 2011
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