27th Aug 2019 08:05
(Alliance News) - Distribution firm Bunzl PLC on Tuesday reported a slight rise in interim profit, despite weakening economic conditions, especially in the UK & Ireland.
Pretax profit climbed 1.6% to GBP200.5 million, with the adjusted figure was up 2.7% to GBP264.2 million. Bunzl's revenue rose 4.3% to GBP4.53 million.
Bunzl increased its interim dividend by 2.0% to 15.5 pence per share.
North America, which makes up over half of Bunzl's business, grew revenue by 0.7% at constant exchange rates, to GBP2.63 billion, with adjusted operating profit up 1.4%. Growth mainly came from the grocery sector, said Bunzl.
The next largest segment, Continental Europe, grew revenue 3.7% at constant rates to GBP906.4 million, and adjusted operating profit by 3.2%, with performance organically and from newly-acquired businesses solid, the company said.
Bunzl's UK & Ireland revenue, however, fell 3.7% to GBP602.5 million, with adjusted operating profit down 10%, mainly due to a business being sold.
Lastly, in Rest of the World division, Bunzl grew revenue 8.2% to GBP385.0 million, with adjusted operating profit falling 0.7%, with underlying growth "good".
"Against the background of slowing macroeconomic and market conditions across the countries and sectors in which we operate, Bunzl has produced a resilient operating performance with high cash conversion and an increased dividend," said Chief Executive Frank van Zanten.
"Looking forward, the group's expectations for 2019 remain unchanged. Despite continuing economic uncertainties, the board believes the combination of our strong competitive position, diversified and resilient businesses and ability to consolidate our fragmented markets will lead to further progress."
"We have a strong balance sheet and are in active discussions with a number of acquisition targets which we anticipate will result in additional deals during the remainder of the year," he added.
Underlying revenue in North America is set to dip slightly for 2019 due to lower sales to a "large" grocery customer, Bunzl said, though Continental Europe will continue to do well, and Rest of the World should continue first half performance levels.
However, the UK & Ireland segment will continue to be held back by difficult conditions, Bunzl said.
Bunzl shares were slightly higher early Tuesday in London at 2,032.00 pence.
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