Can Bunzl clean-up its recent slide with next Tuesday’s Q3 statement?
The distribution and outsourcing firm has spent most of 2018 recovering the losses incurred in late 2017. Opening at £20.73, it struggled to really get going until spring; yet once it did it managed a nice little run, eventually climbing to a 16 month peak of £24.56 by early October. However, the wider market problems have taken a rather sizeable chunk out of that growth, with Bunzl PLC now at a current trading price of £21.98.
Though it may have gone off the boil in the last few weeks, its journey to that aforementioned 16 month high came in large part thanks to its impressive half year results. For the 6 months to the end of June, revenue rose 5% to £4.3 billion, with strong performances across all 4 of its regional divisions (North America, Continental Europe, UK & Ireland and Rest of the World).
It also posted a 4% jump in adjusted pre-tax profit to £257.9 million and a 9% hike to its interim dividend to 15.2p per share, while revealing the acquisition of Norwegian firm Enor AS, its 4th purchase of the financial year with a total spend so far of £132 million.
Given how key M&A is to Bunzl’s current strategy, and that there haven’t been any acquisition announcements since then, a new purchase may be something to watch out for in Tuesday’s third quarter update. Beyond that, investors will want to see a continuation of the revenue growth managed during the first half of the year.
Bunzl PLC (LON:BNZL) has a consensus rating of ‘Hold’ alongside an average target price of £23.57.
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