- Robust first-half results posted
- Full-year earnings guidance lifted as cost pressures ease
- Dividend up again
Distribution services outfit Bunzl (BNZL) topped the FTSE 100 leaderboard on a positive day for markets as it announced a robust set of first-half results and lifted full-year earnings guidance.
The company reported that revenue increased 4.5% to £5.91 billion in the first half of 2023, from £5.65 billion the previous year. Pre-tax profit was up 6.9% year-on-year to £317.1 million. The company also hiked its annual profit forecast – guiding for adjusted operating profit to be moderately higher than in 2022, with its operating margin also a smidge improved. This reflects an easing of cost pressures and initiatives like distributing more of its own branded goods.
Bunzl, which has an acquisition-led model, supplies things that companies need to do business but do not actually sell to customers. Everything from takeaway cups for coffee shops, clean door mats for hotels and offices to hand gels and towels for medical workers. Over the last 20 years its shares, which advanced 3.2% to £28.11 this morning, are up six-fold.
CONSISTENT PERFORMANCE DRIVES DIVIDEND GROWTH
The firm declared an interim dividend of 18.2p, up 5.2%, and said it remained committed to maintaining dividend growth. In February the company raised its dividend for the 30th year running.
Proof that boring companies can make the best investments
Shore Capital analyst Robin Speakman commented: ‘Bunzl offers strong value and investment credentials in our view, in an environment which remains positive overall for underlying organic and acquisitive growth. Fundamentals remain strong backed by excellent cash flow credentials and a strong balance sheet with growing firepower for shareholder value creation.
‘As always, further acquisitions can be expected to drive upgrades as the year progresses. Bunzl remains a quality cash compounding play, in our view.’
