Bunzl's shares jumped sharply on these results, which reported profit improvements across all four divisions and came in somewhat above market expectations. Clearly, the benefits of recent acquisitions, costing £162m over the past year, are coming through to the headline numbers, as underlying margins improved from 6.9 per cent to 7.1 per cent. That offers hope for further improvement once acquisitions are fully bedded down - in particular, the Southern Syringe business, which widened Bunzl's presence in the UK healthcare consumables market.
This financial year has also got off to a good start, helped by the acquisition of Keenpac, which supplies retail packaging. Keenpac expands Bunzl's business in non-food retail packaging, both in the UK and the US, and also offers exposure to new overseas markets. It looks as though Bunzl has further bolt-on acquisitions in mind, too - a view reinforced by the modest level of share buy-backs, which could restrain enthusiasm for the shares in the short term. But there's an implied warning on costs - notably, energy, transport and plastic resins.
That said, brokers are tweaking forecasts slightly upwards and expect 2007 pre-tax profits of around £215m and EPS of 43p.
| Ord price: 691p | Market value: £2.35n |
|---|---|
| Touch: 690-691p | 12-month High: 710p Low: 577p |
| Dividend yield: 2.5% | PE ratio: 18 |
| Net asset value: 144p* | Net debt: 88% |
*Includes intangible assets of £777m, or 229p a share
| Year to | Turnover | Pre-tax | Earnings | Dividend |
|---|---|---|---|---|
| 31 Dec | (£bn) | profit (£m) | per share (p) | per share (p) |
| 2002 | 2.84 | 196 | 27.5 | 11.4 |
| 2003 | 2.73 | 195 | 27.8 | 12.3 |
| 2004 | 2.44 | 158 | 30.7 | 13.3 |
| 2005 | 2.92 | 177 | 36.5 | 15.7 |
| 2006 | 3.33 | 190 | 37.8 | 17.0 |
| % change | +14 | +7 | +4 | +8 |
