TOP NEWS: Bunzl books profit hike despite Covid-19 sales "reversal"

(Alliance News) - Bunzl PLC on Tuesday reported a profit hike of 12% in the first half of 2021 ...

Alliance News 31 August, 2021 | 9:29AM
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(Alliance News) - Bunzl PLC on Tuesday reported a profit hike of 12% in the first half of 2021 despite a "reversal" in Covid-19 related sales and supply chain issues.

The London-based distribution and services company had a strong 2020 due to sales of Covid-19 related products, such as gloves, masks and sanitisers. However, its base distribution business, which covers sectors such as retail, healthcare and catering, is picking up pace as pandemic related sales decline this year.

For the six months that ended June 30, Bunzl booked pretax profit of GBP275.7 million, up 12% from GBP245.4 million. Revenue for the same period was GBP4.87 billion, up 0.4% from GBP4.85 billion.

In addition, the company unveiled its acquisition of two Spanish companies. It bought Zaragoza-based PPE and workwear distribution specialist Proin Pinilla SL and Coruna-based PPE distributor Arprosa SA.

No financial details were disclosed about either deal.

Bunzl trades globally, particularly in Europe, America and Australasia, and flagged international supply chain issues in the half-year. It noted supply and demand for certain products and in certain regions failed to find balance in the period.

"While some regions have seen a strong recovery, others have experienced greater pandemic-related restrictions at various points over the last six months. One of the key strengths of our decentralised business is the ability to respond to local situations," said Chief Executive Frank van Zanten.

"Whilst we are now seeing a reversal in Covid-19 related sales, this has been more than offset by the recovery experienced in our base business over the first half."

The FTSE 100 company declared an interim dividend of 16.2 pence, up 2.5% from 15.8p last year.

It is looking to its acquisition strategy to promote growth following a GBP134 million year-to-date spend. According to van Zanten, Bunzl's active pipeline is "supported by substantial financial headroom".

It expects underlying revenue to exceed 2019, which accounts for pre-pandemic time.

"Looking ahead, we expect future growth to be supported by a recovery in the base business and economic activity, enhanced hygiene trends and our differentiated offering of sustainable and responsible solutions," van Zanten added.

Shares were down 1.4% at 2,641.50 pence in London on Tuesday morning trade.

By Josie O'Brien;

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Securities Mentioned in Article

Security Name Price Change (%) Morningstar
Bunzl PLC 2,487.00 GBX -2.09

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