Bunzl Stock: Mixed Results Drive Strategic Expansion

Bunzl, the British non-food products distributor, reported a 3.6% decrease in statutory profit before tax to £673.6 million for fiscal year 2024, down from £698.6 million the previous year. This decline was primarily attributed to losses related to the disposal of its Argentina business. Despite this setback, the company showed resilience with a slight increase in adjusted profit before tax to £872.9 million and improved adjusted earnings per share of 194.3 pence. Revenue remained relatively stable at £11.78 billion, marginally down from £11.80 billion in 2023. The board has proposed a 7.4% increase in the final dividend to 53.8 pence, bringing the total annual dividend to 73.9 pence—representing an 8.2% increase from the previous year's 68.3 pence.

Regional Performance and Future Outlook

Bunzl's aggressive acquisition strategy formed the cornerstone of its growth initiatives, with a record £883 million invested across 13 acquisitions, including its market entry into Finland and the purchase of catering equipment distributor Nisbets. Regional performance varied significantly, with North America experiencing a 2.6% revenue decline due to price deflation and shifts in food service and retail segments. Continental Europe achieved moderate growth of 4.1%, while the "Rest of World" region excelled with 17.1% revenue growth and a 32.3% increase in operating profit. Looking ahead to 2025, Bunzl maintains its forecast for robust revenue growth with stable operating margins and plans to allocate approximately £700 million annually for acquisitions and capital returns through 2027. The company has already completed a £250 million share buyback in 2024 and is currently implementing an additional £200 million repurchase program.

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Source StockWorld