14th Oct 2020 08:58
(Alliance News) - Distribution and outsourcing company Bunzl PLC on Wednesday said continued growth in the sales of Covid-19 related products, such as masks and sanitisers, offset a drop in sales of other products during the third quarter of 2020.
The company also said it expects revenue in the second half of 2020 to grow strongly at constant exchange rates and a slightly higher second half operating profit margin compared to the prior year, reflecting the year-to-date performance and recent acquisitions.
Shares in the FTSE 100 company were up 5.2% at 2,684.51 pence each in London. Year-to-date the stock is up 30%.
Bunzl recorded 4% growth in third-quarter reported revenue and 8.0% growth in underlying revenue at constant exchange rates, reflecting continued growth in the sale of Covid-19 related products,
Sales of its 'top 8' Covid-19 related products, which are primarily own brand, contributed 17.5% of growth, Bunzl said, adding that this growth more than offset a 9.5% decline in revenue from other product sales.
"Larger orders of the top 8 Covid-19 related products, although lower than in the second quarter, were in line with expectations, with smaller orders also lower but remaining strong. The 9.5% decline in revenue from other product sales was less than the second quarter reflecting the easing of pandemic-related restrictions across the company's markets," the company explained.
Looking forward, Bunzl expects an uncertain outlook mainly due to current coronavirus pandemic trends and reintroduction of movement restrictions in some markets, limiting recovery. It also estimates a limited number of larger Covid-19 related orders.
Bunzl recently completed the acquisition of Abco Kovex, a distributor of flexible packaging based in Ireland with revenue of EUR23 million.
"Growth through acquisitions continues to be an important part of the strategy of the group and the acquisition pipeline remains promising with a number of discussions ongoing," the company said.
By Tapan Panchal; [email protected]
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