Supplying cleaning and safety products and food packaging may be unexciting, but it is a business that has proved pretty recession proof. Bunzl is now looking to accelerate growth with acquisitions and has made eight so far this year: one in North America, where over half its business is done; another in the fast growing Brazilian market; one in a new territory, Israel; and the balance in Europe. More bolt-on deals are planned and the group has over £530m of headroom on banking facilities to finance acquisitions.
Bunzl's first half profit growth was helped along by cost cutting initiatives in the UK and Ireland and acquisitions in Europe, but also by a strong showing in North America where underlying revenues rose 5 per cent. While the best of cost cutting has now been seen, margins have improved significantly in the UK and, also in Australia thanks to tighter cost control and a strengthening of the Dollar.
Analysts at Citi forecast full year pre-tax profits will edge up from £258m to £262m with EPS flat at 56p, but they expect a pick-up in growth next year, pencilling in profits of £287m and EPS of 61p.
BUNZL (BNZL) | ||||
|---|---|---|---|---|
| ORD PRICE: | 715p | MARKET VALUE: | £ 2.4bn | |
| TOUCH: | 714-716p | 12-MONTH HIGH: | 769p | LOW: 579p |
| DIVIDEND YIELD: | 3.1% | PE RATIO: | 15 | |
| NET ASSET VALUE: | 197p | NET DEBT: | 115% | |
| Half-year to 30 Jun | Turnover (£bn) | Pre-tax profit (£m) | Earnings per share (p) | Net div per share (p) |
|---|---|---|---|---|
| 2009 | 2.29 | 95 | 20.4 | 6.65 |
| 2010 | 2.35 | 100 | 21.6 | 7.15 |
| % change | +3 | +6 | +6 | +8 |
Ex-div:10 Nov Payment:04 Jan *Includes intangible assets of £1.21bn or 368p per share | ||||
