Bunzl PLC on Thursday said it expects to report ‘moderate’ profit growth and stable revenue for the current year, followed by further growth despite a tough climate.
The London-based distribution firm said following its strong performance in recent years, it ‘expects to deliver another set of good annual results’.
Adjusted operating profit for 2023 should be ‘slightly ahead’ of previous guidance, delivering ‘moderate growth’ with a slightly higher operating margin.
Revenue should be ‘broadly in line with 2022, at constant exchange rates and excluding the impact of the disposal of our UK healthcare business’.
Including this disposal, Bunzl expects total revenue to be 1% to 2% lower year-on-year at constant exchange rates. It earned £12.04 billion in revenue during 2022, and £885.9 million in adjusted operating profit.
‘I’m pleased with the performance Bunzl has delivered this year, reflecting the dedicated efforts of our people in supporting our customers around the world,’ said Chief Executive Officer Frank van Zanten.
Bunzl noted that its several acquisitions during 2023 helped fuel revenue growth, although it said an expected underlying revenue decline will probably offset this. The decline reflects lower sales related to Covid-19, wider post-pandemic normalisation patterns, and reduced inflation benefit.
Bunzl completed five acquisitions in 2023. These included its purchases of Melbourne Cleaning Supplies and of Flexpost in November, and of Canadian distributor Miracle Sanitation Supply in December.
‘Over the last four years we have committed a cumulative [circa £1.7 billion] to acquisitions,’ commented Van Zanten, ‘reflecting a step-up in our spend, and with our pipeline remaining active and supported by our strong balance sheet.’
Looking further ahead, Bunzel expects planned acquisitions and ‘slightly positive’ organic growth to drive ‘some revenue growth’ in constant currency during 2024. This is ‘despite uncertainties relating to the wider economic and geopolitical landscape’.
Also in 2024, Bunzel expects group operating margin to be ‘broadly in-line’ with this year and to ‘remain substantially higher compared to pre-pandemic levels’.
Shares in Bunzl were trading 2.2% higher at 3,190.00 pence in London on Thursday morning.
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