Bunzl's (BNZL) full-year results were clearly flattered by the impact of currency movements. Beneath this, the outsourcer put in a decent performance, with a 4 per cent constant-currency increase in revenue. Growth was held back by customer losses and price pressure on the disposables it supplies early in the year, but it picked up in the second half following business wins.
Acquisitions remain a key plank of the group's strategy. It made 14 deals with a total committed spend of £184m in the year. The company monitors potential targets looking for opportune moments, such as a succession in a family business. Chief executive Frank Van Zanten says this made the volume of future deals difficult to predict but, with 99 per cent of operating cash flow reaching adjusted operating profit, the group has "a lot of firepower".
The major North America division saw constant-currency growth of 3 per cent, with acquisitions from the past two years providing two percentage points of the growth. The UK and Ireland business has recently suffered shrinking revenue and the loss of a big food retail customer. Constant-currency revenue fell again by 2 per cent in 2016, but a recent contract win with a major caterer and acquisitions in non-food retail should help improve matters.
Analysts at JPMorgan Cazenove are forecasting adjusted pre-tax profit of £533m, giving adjusted EPS of 114p in 2017 (from £478m and 105p in 2016).
BUNZL (BNZL) | ||||
|---|---|---|---|---|
| ORD PRICE: | 2,210p | MARKET VALUE: | £7.42bn | |
| TOUCH: | 2,210-2211p | 12-MONTH HIGH: | 2,535p | LOW: 1,916p |
| DIVIDEND YIELD: | 1.9% | PE RATIO: | 27 | |
| NET ASSET VALUE: | 391p* | NET DEBT: | 94% | |
| Year to 31 Dec | Turnover (£bn) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2012 | 5.36 | 264 | 58.7 | 28.2 |
| 2013 | 6.10 | 290 | 63.5 | 32.4 |
| 2014 | 6.16 | 300 | 64.5 | 35.5 |
| 2015 | 6.49 | 323 | 71.0 | 38.0 |
| 2016 | 7.43 | 363 | 80.7 | 42.0 |
| % change | +14 | +12 | +14 | +11 |
Ex-div: 25 May Payment: 3 Jul *Includes intangible assets of £1.95bn, or 580p a share | ||||
