Bunzl (BNZL) continued its acquisition-led growth strategy last year, acquiring 17 businesses that should generate around £220m in additional annual revenues. This strategy helped boost operating profits by 10 per cent on a constant currency basis (CCS), but operating improvements also aided performance.
The group, which supplies schools, hospitals and hotels with items ranging from cleaning products to food packaging, acquired Canadian cleaning and hygiene supplier Jan-Mar Sales and Spanish healthcare supplier Quirumed. The group's 'rest of the world' division derived particular benefit from its Latin American takeovers, including Lamedid in Brazil and Chilean safety shoe supplier Tecno Boga.
Operating margins in the UK and Ireland rose 40 basis points to 7.4 per cent after the business enjoyed its highest rate of organic growth since 2007, according to chief executive Michael Roney. While tough trading conditions in continental Europe meant organic revenue growth slowed, it streamlined its warehousing and personnel costs, which meant that it was still able to grow regional CCS operating profits by 12 per cent to £103m. However, margins for the group's North American business remained static due to increased competition from its customer base, primarily made up of large businesses looking to squeeze costs.
Broker JPMorgan Cazenove expects adjusted EPS of 90.71p this year, up from 85.19p in 2014.
BUNZL (BNZL) | ||||
|---|---|---|---|---|
| ORD PRICE: | 1,946p | MARKET VALUE: | £6.5bn | |
| TOUCH: | 1,945-1,947p | 12-MONTH HIGH: | 1,969p | LOW: 1,502p |
| DIVIDEND YIELD: | 1.8% | PE RATIO: | 30 | |
| NET ASSET VALUE: | 294p* | NET DEBT: | 89% | |
| Year to 31 Dec | Turnover (£bn) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2010 | 4.8 | 225 | 49.1 | 23.4 |
| 2011 | 5.1 | 194 | 38.2 | 26.4 |
| 2012 | 5.3 | 264 | 58.7 | 28.2 |
| 2013 | 6.1 | 290 | 63.5 | 32.4 |
| 2014 | 6.2 | 300 | 64.5 | 35.5 |
| % change | +1 | +3 | +2 | +10 |
Ex-div: 21 May Payment: 1 Jul *includes intangible assets of £1.5bn or 442p per share | ||||
