The strength of sterling masked an impressive performance from Bunzl (BNZL) at the half-year mark. Reported figures were broadly flat on the 2013 interim, but on a constant currency basis (CCS) the business-supplies distributor achieved significant gains, with sales 7 per cent ahead of last year and operating profits up 13 per cent to £197m.
The group, which supplies supermarkets, hospitals and hotels with products ranging from carrier bags to cleaning products, made progress across all the geographic regions it serves. Growth was strongest in the 'Rest of the World' segment - mainly South and Central America - where CCS revenues and operating profits were up by 29 and 45 per cent respectively.
The performance was boosted across the board by acquisitions. In January, Bunzl made its entry into Germany’s hygiene and healthcare sector though the acquisition of Baumer and its related company Protemo. Three months later Bunzl added Brazil’s Lamedid to its group roster. The company has some fairly heavy commitments linked to its acquisition strategy and related interest on borrowings, but cash generation remains robust. Free cash flow, at £133m, was down slightly on the 2013 interim, but proved sufficient to fund another decent hike in the dividend.
JPMorgan Cazenove expects adjusted 2014 EPS of 80.5p, rising to 83.7p in 2015.
| BUNZL (BNZL) | ||||
|---|---|---|---|---|
| ORD PRICE: | 1,641p | MARKET VALUE: | £5.5bn | |
| TOUCH: | 1,641-1,642p | 12-MONTH HIGH: | 1,710p | LOW: 1,287p |
| DIVIDEND YIELD: | 2.0% | PE RATIO: | 26 | |
| NET ASSET VALUE: | 259p* | NET DEBT: | 102% | |
| Half-year to 30 June | Turnover (£bn) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2013 | 3.0 | 129 | 28 | 10 |
| 2014 | 2.9 | 132 | 28 | 11 |
| % change | -1 | +2 | -1 | +10 |
Ex-div: 06 Nov Payment: 02 Jan *Includes intangible assets of £1.47bn, or 440p a share. | ||||
