24th Feb 2020 07:51
(Alliance News) - Bunzl PLC on Monday said its revenue edged higher in 2019, despite "mixed macroeconomic and market conditions", prompting the distribution firm to lift its dividend.
For 2019, revenue rose 2.7% to GBP9.33 billion from GBP9.08 billion in 2018, helping pretax profit increase by 6.7% to GBP453.3 million from GBP424.8 million.
By segment, only a 1.7% revenue decline to GBP1.24 billion in the UK & Ireland prevented growth across the board.
In North America, revenue climbed 3.7% to GBP5.47 billion and in Continental Europe by 1.8% to GBP1.83 billion. In the Rest of the World, revenue rose by 5.6% to GBP781.6 million.
"Against the background of mixed macroeconomic and market conditions which prevailed during 2019 across the countries and sectors in which we operate, I am pleased to report that Bunzl has produced another resilient performance with an increase in operating margin. It is particularly good to see continued strong cash conversion and free cash flow growth," Chief Executive Officer Frank van Zanten said.
The FTSE 100 firm upped its full-year payout by 2.2% to 51.3 pence per share from 50.2p.
Bunzl also highlighted the GBP124 million worth of acquisition spend it made during the year.
It acquired protective gloves firm Liberty Glove & Safety last February, before completing the takeover of packaging firm Coolpack in April. In November, Bunzl purchased FRSA, a fire-focused personal protection equipment firm in Australia.
Last month, Bunzl sealed the acquisition of packaging firm Joshen Paper & Packaging, which will sit in its North America region.
Bunzl said: "In North America we expect good revenue growth due to the recent acquisition of Joshen but will see the continued impact on revenue in the first half of 2020 from the 2019 price and product specification changes with our largest grocery customer and weakness in the grocery and retail sectors throughout the year. In Continental Europe, despite mixed macroeconomic conditions across the region, we expect to develop further due to the combination of some organic revenue growth."
Bunzl also announced two more acquisitions on Monday for undisclosed sums. The outsourcing firm will acquire Denmark's ICM, a protective gear products provider and Brazilian healthcare products maker Medcorp.
Medcorp's revenue in 2019 was roughly GBP11 million, and ICM's was about GBP48 million. The ICM acquisition needs to approval of Danish competition regulators, which is expected by the end of March.
van Zanten said: "The purchase of Medcorp has expanded our existing healthcare business in Brazil and complements and strengthens our product offering in this sector. The proposed acquisition of ICM will broaden our customer base in the important safety sector in Denmark. The acquisition pipeline is promising and a number of discussions with potential targets are ongoing."
By Eric Cunha; [email protected]
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