Bunzl Anticipates Modest Profit Growth and Strengthened Margins in 2025
Financial Performance and Strategic Developments
Profit Growth Forecast and Market Drivers
Sept 1 (Reuters) - British business supplies distributor Bunzl on Tuesday forecast modest growth in adjusted operating profit this year, supported by improved performance in its North American business and price increases.
Key Details and Market Context
Here are a few details:
North American Business and Investor Activity
• The update comes after U.S. activist investor Elliott reportedly built a stake in Bunzl, as the company pushes ahead with a turnaround of its North American business, its biggest market, and raises prices to offset rising costs linked to the Middle East war.
Operating Margin Outlook
• Bunzl now expects its operating margin at constant exchange rates to be broadly in line with the 7.6% reported in 2025. It had previously forecast a slight decline.
Share Performance
• Shares in the FTSE-100 listed company rose nearly 3% to £28.62 in early trading.
Growth Drivers in North America
• Growth in North America was led by its distribution business, which benefited from new customer wins, improved service levels and higher volumes.
Inflation Impact
• Inflation also supported first-half margins, though the company said much of that benefit was likely to be temporary.
CEO Commentary
• "The macroeconomic backdrop remains uncertain with challenging end markets and volatile input prices," CEO Frank van Zanten said in a statement.
Share Buyback Announcement
• Bunzl also announced a £500 million ($677 million) share buyback.
Adjusted Profit Before Tax
• Adjusted profit before tax rose 8.9% at constant exchange rates to £380.9 million in the six-month period ended June 30.
Additional Information
($1 = £0.7386)
(Reporting by Neeshita Beura in Bengaluru; Editing by Sherry Jacob-Phillips)
