Britain's Bunzl raised its annual adjusted operating profit forecast, benefiting from acquisitions and demand for its own brand business supplies.
The supplier of everything from food packaging to stationery has profited from higher prices for daily-use items, increased penetration of its own brand and recently acquired businesses.
"We are quite keen to expand in the US," CEO Frank van Zanten told Reuters. Bunzl has announced seven bolt-on acquisitions in the past year but none in the US.
Bunzl, which has added over 170 businesses to its portfolio since 1940, has been struggling with lower volumes in the US as de-stocking and inflation hampered demand in the food service sector.
North American revenue, its largest market by revenue, fell 5.1% during the first-half of the year.
Outlook
The company expects adjusted operating profit in 2024 to show a 'strong increase' in comparison with 2023, versus a prior forecast of slightly above the level reported for 2023.
Bunzl also announced a £250 million (€296.04 million) share buyback plan, with a further £200 million (€236.83) return expected by the end of the year.
The company said it will invest about £700 million (€828.90) annually to 2027 in acquisitions and shareholder returns.
'This is a solid update from the group, with a step-up in its capital allocation strategy, coupled with the announcement of the buyback,' said Stifel analysts.
Bunzl, which expects 'robust' annual revenue growth, with a small fall in underlying revenue, reported a 7.4% rise in adjusted operating profit for the six months ended 30 June, with a slight decline in revenue.
Zanten stated, "I remain confident that the resilience of our business model, the diversification of our portfolio across sectors and regions, and the consistent focus on our strategic priorities will continue to support the group's performance and maintain our strong track record of value creation."
News by Reuters, additional reporting by ESM.
