Interim Management Statement

RNS Number : 0382P

Bunzl PLC

19 October 2012

 



19 October 2012

BUNZL INTERIM MANAGEMENT STATEMENT AND ACQUISITION IN THE UK

Bunzl plc, the international distribution and outsourcing Group, today announces its interim management statement for the period since 30 June 2012.

Overall trading has been consistent with expectations at the time of the half year results announcement in August.  At constant exchange rates Group revenue is up 5% for the third quarter and 6% year to date, in each case compared to the equivalent periods last year, due to underlying revenue growth and the positive impact from acquisitions, net of the disposal of the UK vending business in August 2011.  There has been some moderation in the underlying revenue growth rate to 2% for the third quarter, particularly in North America where comparatives are challenging due to the strong performance in 2011, and also an increased negative impact from exchange translation of between 2% and 3% in the third quarter compared to the same period last year. 

In relation to the third quarter, at constant exchange rates:

·      In North America revenue growth was 5% with lower underlying growth of 2%, compared to the first half of 2012, due to a reduction in product input prices, especially for resin based products, and the impact on the growth rate of a significant new customer which commenced trading with Bunzl in the third quarter of 2011.  There has been a slight improvement in the operating margin.

·      In Continental Europe, although the economic environment throughout the region continues to be weak, the combination of slightly improved underlying revenue growth compared to the first half of 2012 and the impact of acquisitions have led to strong revenue growth albeit with a decline in the operating margin.

·      UK & Ireland showed increased profits as a result of an improved operating margin in spite of a sluggish economy and continued modest underlying revenue growth.

·      In Rest of the World the combination of underlying growth and the impact from acquisitions has led to substantial revenue growth albeit with some pressure on the operating margin.

Acquisition growth is a key element of the Company's strategy and today the Company is announcing the purchase of Indigo Concept Packaging Limited.  Indigo is based in the UK and is principally engaged in the sale of quality retail packaging products to a variety of customers.  Revenue in the year ended 31 December 2011 was £6 million.  The acquisition pipeline is promising and the Group continues to expect to complete more transactions this year.  Seven acquisitions have been announced so far year to date with annualised revenue of £163 million.

There has been no significant change in Bunzl's financial position during the period and the Group continues to have substantial funding headroom available.  The Company's strong cash flow and balance sheet continue to give the Group the flexibility to consolidate the markets in which it competes.

Although it is difficult to predict the future direction of economies globally, the Board believes that the Group's businesses, which have leading positions in relatively resilient sectors, should continue to develop due to underlying growth and the positive impact from acquisitions.

Enquiries:

Bunzl plc Michael Roney, Chief Executive Brian May, Finance Director Tel: [phone]

Tulchan David Allchurch Stephen Malthouse Tel: [phone]

 

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