Disposal and Trading Update
Bunzl PLC
26 June 2002
FOR IMMEDIATE RELEASE 26 June 2002
BUNZL SELLS PAPER DISTRIBUTION AND GIVES
TRADING UPDATE AHEAD OF ANALYST MEETINGS
Bunzl plc, the international Group supplying business to business consumables,
today announces that it has entered into an unconditional agreement to sell its
Paper Distribution business in the UK and Ireland to PaperlinX Limited of
Australia. The aggregate consideration of approximately £138.8 million
comprises approximately £64.1 million which will be payable in cash on
completion, £56.7 million of borrowings which will either be repaid or assumed
by PaperlinX and £18 million of unconditional deferred cash consideration
payable as to £10 million and £8 million on the first and second anniversaries
of completion respectively. Completion is expected to take place on 1 July
2002.
Combined net assets of the business being sold on a net debt free basis are
estimated to be £100.8 million at completion. In addition goodwill associated
with the business being sold will be £28.4 million. Sales and operating profit*
for the year ended 31 December 2001 were £318.2 million and £15.5 million
respectively.
The sale proceeds will be used to reduce net borrowings.
Anthony Habgood, Chairman of Bunzl plc, said:
'While Paper Distribution represented only 7% of Group operating profit in 2001,
this disposal marks an important stage of Bunzl's evolution representing a final
break with the paper industry with which Bunzl has been associated for over a
hundred years. It is the last step of a process which has seen Bunzl reducing
its commitment to paper and channelling resources into its higher return, higher
growth businesses, particularly outsourcing.
Paper Distribution has been a good business for Bunzl and I am delighted that it
is to become a core part of PaperlinX, whose strategy is to develop in paper
distribution internationally.'
Bunzl also announces that it will be speaking to analysts over the next two days
prior to its close period for the half year to 30 June 2002. The Company will
be indicating that:
• The disposal of Paper Distribution announced today will be mildly
dilutive reducing the rate of growth of adjusted earnings per share for the
current year.
• Outsourcing Services continues to progress satisfactorily with robust
volume growth offsetting price deflation and recent acquisitions integrating
well.
• Filtrona is growing strongly reflecting the demand for special
filters in both Eastern Europe and Asia.
• While Plastics is still being impacted by the general economic
slowdown especially in the US, performance continues to be stronger than in the
second half of 2001.
• Despite today's announcement and the recent weakening of the US
dollar, the overall outcome for the year is still expected to be within the
range of market estimates.
While the economic outlook remains uncertain, the Group is well positioned to
withstand recessionary pressures and continues to produce good results. The
results for the six months to 30 June will be published on 27 August 2002.
* before goodwill amortisation
Enquiries:
Bunzl plc: Finsbury:
Anthony Habgood, Chairman Roland Rudd
David Williams, Finance Director Tel: 020 7251 3801
Tel: 020 7495 4950
This information is provided by RNS
The company news service from the London Stock Exchange
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