Bunzl, a distributor of cleaning and safety products and outsourced food packaging, produced full-year results at the top end of analyst expectations thanks to a boost to margins in the UK and Europe from cost-cutting in the second half. There was also less of a penalty from currency weakness while measures to combat swine 'flu benefited sales of cleaning and safety products in Europe.
However, once again the trading performance has been mixed, with North America providing some underlying growth while trading in the UK and Europe remained difficult due to the impact of the recession on the hotel and catering and non-food retail sectors. Prospects continue to be challenging especially in the UK and Ireland, although further benefits are coming though from cost-cutting measures. Overseas, new business wins are offsetting pressure on prices in North America while Bunzl expects to see improved margins in Australia and a return to growth in Brazil.
Having made two acquisitions so far this year, both in Denmark, Bunzl continues to look for good bolt-on deals and has nearly £550m headroom on its borrowing facilities to do so.
House broker Citi has moved its 2010 forecast up a shade and now expects adjusted pre-tax profits of £262m and EPS of 56.2p (£258m and 55.9p in 2009).
BUNZL (BNZL) | ||||
|---|---|---|---|---|
| ORD PRICE: | 653p | MARKET VALUE: | £2.14bn | |
| TOUCH: | 651-653p | 12-MONTH HIGH: | 683p | LOW: 482p |
| DIVIDEND YIELD: | 3.3% | PE RATIO: | 14 | |
| NET ASSET VALUE: | 205p* | NET DEBT: | 106% | |
| Year to 31 Dec | Turnover (£bn) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2005 | 2.92 | 177 | 36.5 | 15.7 |
| 2006 | 3.33 | 190 | 37.8 | 17.0 |
| 2007 | 3.58 | 191 | 39.8 | 18.7 |
| 2008 | 4.18 | 207 | 44.5 | 20.6 |
| 2009 | 4.65 | 216 | 46.4 | 21.6 |
| % change | +11 | +4 | +4 | +5 |
Ex-div: 5 May Payment: 1 Jul *Includes intangible assets of £1.20bn, or 364p a share | ||||
