Bunzl upgrades profit guidance amid acquisition boost

The FTSE 100 firm expects adjusted operating profits for 2024 to ‘show a strong increase in comparison with 2023’.

Distribution specialist Bunzl has upgraded its profit guidance (John Stillwell/PA) (PA Archive)

Distribution and outsourcing firm Bunzl has increased its profit guidance for the year, with acquisitions set to boost sales.

The FTSE 100 business told shareholders it now expects adjusted operating profits for 2024 to “show a strong increase in comparison with 2023” after a recent improvement in profit margins.

It came as Bunzl reported that adjusted operating profit grew by 3.9% to £455.5 million over the first half of this year.

Bosses at the company said it has boosted its profit margins in recent years through good cost management, “increased own-brand penetration”, and the positive impact of acquisitions.

Meanwhile, revenues dipped by 3.3% to £5.71 billion for the period, compared with the same period last year, with a 0.4% decline after accounting for exchange rates.

Today the group is in an excellent position to pursue our pipeline of value-accretive acquisitions within the very large and fragmented global markets that we operate in, and also return excess cash to shareholders

Bunzl chief executive Frank van Zanten

Nevertheless, Bunzl said it expects to “deliver robust revenue growth” at constant exchange rates over the year, driven by its acquisitions.

The company has already committed to £650 million worth of acquisitions to help drive its expansion.

Chief executive Frank van Zanten said: “I am very pleased with the performance of the group during the first half of 2024, with strong growth in adjusted operating profit for the period.

“Today the group is in an excellent position to pursue our pipeline of value-accretive acquisitions within the very large and fragmented global markets that we operate in, and also return excess cash to shareholders.

“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.”