24th Feb 2014 08:06
LONDON (Alliance News) - Distribution and outsourcing company Bunzl PLC Monday reported strong growth in profits and revenues in 2013, driven mainly by further acquisitions as it announced two new deals in Germany and Czech Republic.
The company is highly acquisitive, snapping up small, normally family-run, businesses in its highly fragmented markets. It spent GBP295 million on 11 acquisitions in 2013 alone.
That helped push up revenues to GBP6.1 billion, from GBP5.36 billion in 2012, with only 2% of that coming from organic growth. That helped push up the company's pretax profit to GBP289.9 million, from GBP263.8 million, with margins also improving.
Chief Executive Michael Roney said Bunzl's acquisition-driven strategy would continue, noting that the company could spend around GBP500 million a year without over-extending its debt position. Its net debt compared with earnings before interest, tax, depreciation and amortisation stood at 1.8 times at the end of the year, flat from a year earlier and well below the range the company has said it would be comfortable with.
Operationally, the company reported that revenues grew 15% in North America, 2% in Continental Europe, and 2% in the UK and Ireland. However, Roney noted that the operating margin in the UK had recovered to 7.0% for the first time since 2008.
The company's operating profit in the rest of the world rose 65% at constant exchange rates to GBP51.2 million, as many of the acquisitions made came in these regions.
Bunzl separately said Monday that it had bought Dusseldorf-based hygiene and healthcare supplies distributor Bäumer Betriebshygiene Vertriebsgesellschaft mbH and its related company Protemo GmbH in Germany. The aggregate revenue of both companies was EUR11.9 million in 2013.
It has also bought Prague-based Oskar Plast sro, which sells disposable packaging products to customers throughout the Czech Republic including retail chains, food processors and other distributors. Its revenues were CZK284 million in 2103.
Bunzl raised its 2013 dividend by 15% to 63.5 pence, from 58.7 pence.
By Steve McGrath; [email protected]; @SteveMcGrath1
Copyright © 2014 Alliance News Limited. All Rights Reserved.
Related Shares:
Bunzl