Bunzl’s annual revenue hits £12bn on back of price increases

Bunzl’s turnover topped £12billion last year, as price hikes and a recovery in its core business offset declining demand in its healthcare division.

The business supplier, which distributes products like hard hats, disposable tableware and packaging to companies, revealed annual revenue increased by about £1.75billion from £10.3billion the previous year.

Trading was buffeted by rising demand across all regions, and higher orders from sectors like grocery, food service and retail compensating for the loss of Covid-related business.

Results: Bunzl revealed annual revenue increased by 9.8 per cent from £10.3billion in 2021 following volume recovery in the core business and solid expansion across all territories

Underlying sales contributed around two-thirds of total growth, partly driven by price hikes in response to inflationary pressures, particularly from fuel and freight costs in North America.

Its British Isles division saw the fastest jump in core turnover of 12.2 per cent, thanks to the return of leisure and sporting activities, workers commuting to offices, and consumers eating out at hospitality venues.

In addition, Bunzl noted impressive performances from its UK and Ireland-based cleaning and hygiene segments.

The remaining third of sales growth was credited to acquisitions. The group agreed 12 takeovers in 2022, having spent more than £500million buying 14 companies the previous year.

Among the takeovers made last year included PM Pack, a packaging and butchery machines supplier in Denmark, Corsul Group, a major personal protective equipment distributor in Brazil, and occupational shoemaker VM Footwear.

On Monday, the firm also announced it had agreed to obtain German online workwear and PPE seller Arbeitsschutz-Express, and completed the purchase of Canadian packaging distributor Capital Paper.

Mergers and acquisitions form a core element of Bunzl’s long-term strategy to expand into new markets and industries, although it recently got rid of its UK healthcare business. The division contributed £216million in revenues in 2021.

Together with strong organic revenue growth, this has helped the group’s net profit rise for the last 11 consecutive years and boost its annual dividend per share for three successive decades.

The company expects sales to be ‘slightly higher’ during the year ahead, even with heightened economic uncertainty caused by surging inflation and the Ukraine war.

Bunzl shares were up 2.1 per cent to £30.77 on late Monday morning, meaning their value has increased by around a third in the past two years.

Russ Mould, investment director at AJ Bell, said Bunzl’s robust results and near-record share price highlight the ‘key virtues’ driving the company’s success.

These include ‘a strong competitive position; the careful use of acquisitions to add to the company’s organic momentum; and a consistent record of increased dividend payments’, Mould said. 

This post first appeared on Dailymail.co.uk