Bunzl Pencils Deals, Resumes Dividend After H1 Profit Jumps 16.6%
Bunzl Plc resumed dividends and reported first-half profit and revenue that surpassed analysts' expectations on Monday, bolstered by robust demand for the protective masks and gloves it has supplied in the coronavirus crisis.
Known for making small acquisitions aimed at growing specific parts of its business over the years, Bunzl also announced that it had entered into deals to buy MCR Safety, a U.S.-based personal protection equipment business, and Abco Kovex, a packaging distributor in Ireland.
The company, which supplies products ranging from disposable tableware to latex gloves and cleaning chemicals to private and government sectors, said adjusted pretax profit rose 16.6% to £306.8 million. Revenue grew 6.7% at £4.85 billion.
Analysts had expected revenue of about £4.80 billion and adjusted pretax profit of £296 million, according to a company-compiled consensus.
At the height of coronavirus-led lockdowns in April, the company benefited from rising demand from grocery, healthcare as well as cleaning & hygiene sectors. However, the food service and retail sectors, which account for around 35% of its business, had been severely hit since March.
"Looking forward, although there remains considerable uncertainty, we expect to face challenging trading conditions during the second half of the year," said Chief Executive Officer Frank van Zanten.
"However the fundamental aspects of our business model remain attractive."
Bunzl reinstated its 2019 dividend of 35.8 pence per share as an additional interim dividend for 2019. It declared an interim dividend for 2020 of 15.8 pence per share.
It had scrapped its final dividend proposal in April.