Bunzl full-year numbers boosted by acquisitions, weaker pound

Distribution and outsourcing group Bunzl posted a 13% jump in full-year pre-tax profit on Monday thanks to recent acquisitions and a weaker pound.

In the year to the end of December 2017, adjusted pre-tax profit rose to £542.6m from £478.2m on revenue of £8.6bn, up 16%. Meanwhile, adjusted earnings per share increased to 119.4p from 106.1p the year before and the dividend for the year was lifted 10% to 46p.

Adjusted operating profit was up 12% to £589.3m, while organic revenue growth was up 4.3% compared to the previous year to its highest level since 2006, mainly due to the additional business won in North America towards the end of 2016.

Revenue in North America rose 10% to £5.1bn due to the impact of higher organic growth and the effect of acquisitions, while revenue in the UK and Ireland was up 9% to £1.2bn. Continental Europe saw revenue increase 12% to £1.6bn and Rest of World revenues were 5% higher at £718.6m.

Bunzl said the weakening of the pound against most currencies in 2016 had a significant positive impact on its reported results in 2017, as 87% of its revenue is generated outside of the UK.

Chief executive Frank van Zanten said: "Bunzl has once again delivered good increases in revenue, adjusted operating profit and adjusted earnings per share due to a combination of an increased level of organic revenue growth and the impact of recently acquired businesses. 2017 was a record year for committed acquisition spend, which at £616m significantly exceeded the previous high of £327 million achieved in 2015, and the pipeline of potential acquisitions for this year remains promising.

"Looking forward, we believe that the prospects of the group are positive due to our strong market position and our well established and successful strategy to grow both organically and by further consolidating the fragmented markets in which we compete."

UBS said the results were solid, with adjusted pre-tax profit ahead of the bank's and consensus estimates of around £530m and EPS better than the 114.1p pencilled in.

It added that while the company remains positive that it can grow both organically and with M&A, having spent a record £616m on 15 deals in FY17, the pace may slow from here.

At 1522 GMT, the shares were down 1.3% to 1,985p.