Strong growth in Europe drives Bunzl first half profit
Distribution and outsourcing group Bunzl announced its first acquisition in Norway on Tuesday and reported a 4% increase in first-half profit growth in Europe more than made up for the negative effect of the strengthening pound on overseas profits.
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Adjusted pre-tax profit for the six months to the end of June rose to £257.9m from £248.3m as revenue increased 5% to £4.3bn, driven by organic growth and acquisitions. At constant exchange rates profit increased 10%. The half-year dividend rose 9% to 15.2p.
Sterling’s climb against the dollar caused adjusted operating profit to fall to £140.1m from £148m at Bunzl’s biggest business in North America. Excluding currency movements, profit in the region rose 3%.
In Continental Europe, profit rose to £88.6m from £73.1m. Reported growth in Europe was also constrained by the stronger pound - at constant currency profit rose 22%.
In the UK and Ireland profit rose 5% at constant exchange to £39.7m and in the rest of the world profit rose to £28.2m from £25.1m - a 23% increase at constant exchange.
Chief executive Frank van Zanten said: "Bunzl has delivered another good set of results with double digit increases at constant exchange rates in revenue, adjusted operating profit and adjusted earnings per share.
"Looking forward to the rest of the year, the board is confident that the prospects for the group are positive and that the company will continue to develop the business and build shareholder value through a combination of organic growth and further acquisitions as the year progresses."
Revenue growth at existing businesses was 5.2%, which the company said was an improvement. Bunzl has expanded through acquisitions and it announced the purchase of Norwegian catering equipment supplier Enor for an undisclosed sum alongside the results. The Enor deal took Bunl's acquisition tally in 2018 to four.