Bunzl ups annual revenue forecast as business supplies group is boosted by surging inflation and acquisitions
- Bunzl has increased its annual revenue forecast in an upbeat trading update
- The group’s first half revenue is expected to increase by 16% year-on-year
Specialist international distribution and services group Bunzl expects to deliver ‘very strong’ revenue growth for the six months ending 30 June.
Upping its annual outlook, the FTSE 100-listed company told investors on Thursday it also expects improved margins over the period after an upturn in acquisitions.
The group’s first half revenue is expected to increase by 16 per cent year-on-year, it said in a trading update.
Update: Bunzl has upped its annual revenue forecasts amid high inflation
The company’s operating margin continued to improve in the UK & Ireland over the period.
Bunzl said inflation had been a key driver of its performance and revenue growth, but this was offset in part by the continued normalisation of sales of pandemic-linked products.
The group previously forecast ‘moderate’ revenue growth for 2022, with acquisitions supported by a ‘slight increase’ in organic revenue.
Frank van Zanten, the group’s chief executive, said: ‘Bunzl has delivered another period of strong growth.
‘We continue to demonstrate the strength of our business model, supported by the depth and resilience of our supply chains and the agility of our people who have responded to the inflationary environment so successfully.
‘Our acquisition momentum remains strong, with our active pipeline supported by a strong balance sheet.’
Revenue growth remained strong in North America and continental Europe, while the Rest of the World region’s growth has been more moderate, with strong growth in Asia Pacific partially offset by a decline in Covid-19 related sales in Latin America.
Bunzl said: ‘The Group is upgrading its guidance for the year on the basis of very strong revenue growth to date and announced acquisitions.
‘At constant exchange rates the Group now expects very good revenue growth in 2022, driven by good organic revenue growth and the positive contribution of acquisitions announced in the last 12 months.
‘Growth of the base business is expected to be only partially offset by the further normalisation of sales of Covid-19 related products, albeit these are expected to remain ahead of 2019 levels. We continue to expect Group operating margin in 2022 to be slightly higher than historical levels.’
Bunzl shares were up 1.87 per cent or 50.00p to 2,721.00p in early morning trading, having risen by around 13 per cent in the last year.