Bunzl shows its strength

In fact, revenue rose even on an underlying basis – that is, before acquisitions – thanks to spiking demand for the sort of products that now surround us: gloves, face masks and cleaning equipment.

The group's geographical spread provides a degree of insulation even in the midst of a global pandemic. Although adjusted operating profit was down significantly in the UK and Ireland due to Covid-19, other locales fared well by comparison. The performance in continental Europe was particularly strong, as a shift to more profitable sectors pushed the operating margin from 10.1 to 11.4 per cent, thereby offsetting dips in food service and North America – the latter of which makes up more than half of group sales.

This allowed management to erase the period’s one blot – April’s cancellation of the final 35.8p per share dividend for 2019 – which will now be paid alongside the half-year distribution. A 27-year track record of unbroken dividend increases can once again be claimed (just about), no doubt to the consternation of any investor who sold when markets were tanking five months back.

Regardless of the good news on distributions, the group had had to contend with the knock-on effects of the lockdowns. Trade receivables more than 60 days overdue have almost doubled to £60m, with “customers either entering insolvency processes or illustrating specific credit stress indicators that impact the recoverability of receivables and customer specific inventory”. The increased risk linked to receivables resulted in a net charge of £10m, in addition to an additional £20m charge in the period relating to aged receivables and customer specific inventory issues for those customers identified as high or medium credit risk.

FactSet-compiled consensus forecasts are for earnings of 120p per share for the 12 months to December, rising to 126p in 2021.