Food packaging and hygienic clothing distributor Bunzl reported solid progress with its full-year figures. Profits only slipped at all because of a £56m loss on the disposal of its UK vending business - underlying pre-tax profits, supported by acquisitions, actually rose 11 per cent in 2011 to £306m, while organic revenue growth reached a reasonable 4 per cent.
Moreover, Bunzl's operating margin rose 20 basis points to 6.6 per cent and cash generation remains strong. Free cash flow rose £101m to £275m, which allowed the group to fund £185m-worth of acquisitions and to bolster the dividend. Acquisitions also helped continental European sales to rise 12 per cent in the year to £1.1bn, while the North American business grew sales 7 per cent to £2.7bn, helped by new business wins - particularly in grocery. Still, a tough trading environment in UK and Ireland meant sales there slipped 1 per cent to £997m. Although, despite the uncertain economic backdrop, chief executive Michael Roney thinks Bunzl's "resilient business model" and "promising acquisition pipeline" should continue to deliver growth.
Broker Panmure Gordon upgraded forecast EPS for 2012 by 4 per cent to 70.46p (68.5p in 2011).
BUNZL (BNZL) | ||||
|---|---|---|---|---|
| ORD PRICE: | 946p | MARKET VALUE: | £3.1bn | |
| TOUCH: | 943-946p | 12-MONTH HIGH: | 951p | LOW: 651p |
| DIVIDEND YIELD: | 2.8% | PE RATIO: | 25 | |
| NET ASSET VALUE: | 244p* | NET DEBT: | 81% | |
| Year to 31 Dec | Turnover (£bn) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2007 | 3.58 | 191 | 39.8 | 18.7 |
| 2008 | 4.18 | 207 | 44.5 | 20.6 |
| 2009 | 4.65 | 216 | 46.4 | 21.6 |
| 2010 | 4.83 | 225 | 49.1 | 23.4 |
| 2011 | 5.1 | 194 | 38.2 | 26.4 |
| % change | +6 | -14 | -22 | +13 |
Ex-div: 9 May Payment: 2 Jul *Includes intangible assets of £1.26bn, or 380p a share | ||||
