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Bunzl PLC on Tuesday said it was resuming its share buyback programme, as it reiterated annual guidance after a first half which saw a drop in profit and modest sales growth. In response, shares in Bunzl rose 5.0% to 2,502.00 pence each in London on Tuesday morning in London. The wider FTSE 100 was down 0.7%. The London-based distribution and services company said pretax profit declined 11% to £250.1 million in the six months to June 30 from £279.4 million a year prior. Adjusted operating profit fell 11% to £404.5 million from £455.5 million a year ago, compared to Visible Alpha consensus of £405.3 million, with adjusted earnings per share of 77.8 pence, down 14% from 90.8p. Operating margin declined to 7.0% from 8.0%. Revenue increased by 0.8% to £5.76 billion from £5.71 billion, or by 4.2% at constant currency, in a ‘challenging operating environment.’ In North America, the adjusted operating profit decline was driven by ‘execution challenges’ in its largest business, that services food service and grocery customers, in a ‘challenging macro economic environment.’ In Continental Europe, adjusted operating profit was particularly impacted by the performance in France, where ongoing deflation, and a weak economy was compounded by operating cost inflation. Bunzl said good progress was being made to improve operational performance in North America and Continental Europe. The firm reiterated its 2025 outlook and expects an improved performance in the second half with a moderated year-on-year operating margin decline compared to the first half. The company expects moderate revenue growth in 2025, at constant exchange rates, driven by announced acquisitions, and broadly flat underlying revenue, compared to £11.78 billion in 2024. Bunzl expects group operating margin for the financial year to be moderately below 8.0%, compared to 8.3% in 2024. The interim dividend was increased 0.5% to 20.2p per share from 20.1p. In addition, Bunzl said it was resuming its share buyback programme, with the intention of completing the remaining £86 million of its previously announced £200 million plan in the second half of the year. The buyback was paused in April when Bunzl lowered guidance amid weaker-than-expected trading. Chief Executive Frank van Zanten said: ‘Actions taken in our largest business in North America have re-energised the team and we are seeing early positive indicators of success, with the profit momentum seen through the first half in-line with our expectations.’ The CEO said in continental Europe, the operating environment remains ‘challenging’, with the French business particularly impacted by ongoing deflation and a weak market. Bunzl also announced two acquisitions in Spain and Mexico respectively. In July, the firm said it completed the acquisition of Quindesur, a Spanish distributor of foodservice and cleaning & hygiene products, which in 2024 generated revenue of €14 million, around £12 million. In August, Bunzl completed the acquisition of Guantes Internacionales SA de CV, an own brand personal protective equipment distributor based in Mexico, which in 2024 generated revenue of around £17 million. ‘Our acquisition pipeline remains active, and we see significant opportunity for continued expansion,’ the CEO van Zanten added. Copyright 2025 Alliance News Ltd. All Rights Reserved.
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