Bunzl, the distribution and outsourcing group, saw its stock rise today, buoyed by healthy half-year profits and an upbeat statement by chief executive Frank van Zanten.
The Bunzl share price was 0.75% higher in morning trading in London, a 17.5p rise to 2,347.5p.
The group announced pre-tax profits for the six months to the end of June up 8% on the first half of 2017, at £197.3 million, up from £181.9 million. The interim dividend was 9% higher than a year ago, at 15.2p a share, from 14p.
Big rise in North America revenues
Basic earnings per share were 13% higher, at 45.1p from 40p, and revenue was £4.343.7 million, against £4,119.2 million in the first half of last year. This was 5% higher in a straightforward comparison and up 12% when exchange-rate fluctuations were taken into account.
Broken down geographically, revenue in Bunzl’s largest market, North America, rose from £2.432.6 million to £2,459.6 million, a 10% increase when exchange-rate movements are taken into account. Adjusted operating profit, which disregards write-downs in the value of customer relationships and acquisition-related items, was £140.1 million, against £148.1 million in the first half of 2017, but this becomes a 3% rise once exchange-rate movements are accounted for.
Operating profit is calculated as profit from business operations before interest payments of tax is deducted.
Operating margin in North America, adjusted on the same basis, fell from 6.1% in the first half of last year to 5.7%.
One-stop shop across 30 countries
In the UK and Ireland, revenue was 11% higher, once exchange rates were accounted for, at £625.9 million, against £566.1 million in the first half of last year. Adjusted operating profit was £39.7 million, against £39.9 million, a 5% rise once exchange-rate effects were discounted.
Operating margin declined from 6.7% in the first half of last year to 6.3%.
Adjusted operating profit rose 22% once currency fluctuations were accounted for, from £73.1 million in the first half of last year to £88.6 million. Operating margin improved from 9.5% to 10%.
In the rest of the world, revenue rose from £351.5 million to £368 million, a 14% increase after adjusting for currency movements. Adjusted operating profit, again with currency movements discounted, rose 23% from £25.1 million to £28.2 million, while operating margin rose from 7.1% in the first half of last year to 7.7%.
In the 2017 Bunzl annual report, the group said of its business: “We provide a one-stop-shop distribution and outsourcing service across 30 countries, supplying a broad range of internationally sourced non-food products to a variety of market sectors.”