24th Oct 2023 08:09
(Alliance News) - Bunzl PLC on Tuesday affirmed annual profit guidance, though it said its third-quarter revenue outcome was hurt by a fall in Covid-19-related sales and less inflationary tailwinds.
The distribution firm said revenue in the third-quarter ended September declined by 4.8% at constant exchange rates. Underlying revenue, adjusted for the number of trading days, fell 4.7%. There was one fewer trading day than a year prior.
At actual exchange rates, revenue was 8.8% lower amid a weaker sterling.
Shares in Bunzl opened down 4.0% at 2,797.00 pence each in London on Tuesday morning.
Bunzl put the revenue fall to a "continued decline in Covid-19 related product sales" and a lesser benefit from inflation.
It also said there was a "wider post-pandemic related normalisation trends which drove expected volume weakness".
Bunzl said "We reiterate our confidence in the group's 2023 adjusted operating profit being moderately higher than in 2022 at constant exchange rates. We expect group revenue, at constant exchange rates, to be slightly lower than in 2022, with the benefit of announced acquisitions offset by some organic decline, following strong organic growth in recent years, and a small impact from the UK healthcare disposal. Operating margin in 2023 is now expected to reach the record level seen in recent years."
It achieved revenue of GBP12.04 billion in 2022, and adjusted operating profit of GBP885.9 million.
Also on Tuesday, Bunzl said that it acquired CT Group, a distributor of surgical and medical devices and provider of value-added logistics services to health providers in Brazil. The deal, which it said will "enhance" its presence in Brazil, was done in September. It is subject to competition clearance.
Towards the end of August, it completed a deal to buy Pittman Traffic & Safety Equipment in Ireland, a distributor of safety and asset protection solutions, such as bollards, speed bumps and workplace barriers.
"This acquisition supports the expansion of our North America based McCue business, which already has a UK presence. Pittman Traffic & Safety Equipment generated revenue of EUR7 million in 2022," Bunzl said.
By Eric Cunha, Alliance News news editor
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