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Bunzl PLC on Monday hiked its dividend, after reporting higher annual profit. The London-based distribution and services company also said it has snapped up two companies, one in the UK and one in Finland. Shares in Bunzl were down 5.4% to 3,126.00 pence each in London on Monday morning. Over the past 12 months, the stock is up 1.2%. Bunzl said revenue in 2023 edged down 2.0% year-on-year to £11.80 billion from £12.04 billion, though remained ‘significantly ahead’ of 2019. This drop is in line with company and market expectations. ‘The base business was impacted by volume loss in our North America foodservice redistribution business due to deflationary pressure increasing price competition, post-pandemic normalisation trends, and a reduced level of inflation benefit,’ Bunzl explained. However, despite the weaker topline performance, pretax profit rose 10% to £698.6 million from £634.6 million, as operating margin increased to 8.0% from 7.4%. Recommending a final dividend of 50.1 pence, the total dividend for 2023 increased by 8.9% to 68.3p from 2022’s 62.7p. ‘Bunzl’s consistent, compounding model drives both growth and resilience, and the progress we have made in recent years, combined with the strength of our financial position, means that we have a stronger platform than ever to drive market share, consolidate fragmented markets and continue to extend our successful track record for creating long term sustainable value,’ said Chief executive Frank van Zanten. Separately, Bunzl announced the acquisition of a 80% stake in catering equipment and consumables distributor Nisbets for £339 million. For 2023, Nisbets generated revenue of £498 million with a profit before interest, tax and amortisation of £40.2 million. Bunzl noted that an additional earn-out amount may be payable based on Nisbets’ financial performance in 2024. It added that the transaction includes put/call options that enable Bunzl to acquire the remaining 20% stake in the future at a price based on Nisbets’ financial performance at the time of option exercise. It also noted its first acquisition in Finland, agreeing to buy Pamark, a distributor of products in cleaning & hygiene, healthcare, foodservice and safety categories. This is Bunzl’s first acquisition in Finland and will increase the number of countries in which Bunzl operates to 33. Copyright 2024 Alliance News Ltd. All Rights Reserved.
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