BUNZL PLC, a specialist international distribution and services Group, has released a pre-close statement, upgrading its guidance for the year based on improved margin performance. The Group expects robust revenue growth in 2024, driven by acquisitions and good margin management, with a small decline in underlying revenue. Group operating margin is anticipated to be slightly above the level reported for the full year 2023.
The first half of 2024 is expected to see a decrease in group revenue year-on-year, mainly driven by volume reductions and deflation in the US business. However, the Group anticipates a strong improvement in group operating margin compared to the first half of 2023, resulting in robust adjusted operating profit growth at constant exchange rates.
The decline in underlying revenue in North America is attributed to volume reductions in the US foodservice redistribution business, transitioning customer specific inventory in the US retail business, and deflation. However, second quarter revenue trends in North America are expected to improve compared to the first quarter, with volumes starting to recover. The Group also expects a moderate decline in underlying revenue in Continental Europe and UK & Ireland, and some growth in Rest of the World.
BUNZL PLC has recently completed the acquisition of Clean Spot, a distributor of cleaning and hygiene products and equipment in Canada, and signed an agreement to acquire RCL Implantes, a Brazilian distributor specializing in surgical and medical devices. These acquisitions are expected to strengthen the Group's position in the respective markets.
Frank van Zanten, Chief Executive Officer of Bunzl, expressed satisfaction with the ongoing successful margin management and increasing penetration of own brands across the Group, allowing for the upgrade of the full-year profit outlook. He also highlighted the completion of two acquisitions, bringing the total committed spend on acquisitions to around £600m so far in the year.
In conclusion, BUNZL PLC's margin growth and profit upgrade for the full year, driven by good margin management, acquisitions, and ongoing successful margin performance, reflect the Group's robust performance and strategic expansion in key markets.