BUSINESS LIVE: CMA probes eight housebuilders; Bunzl buys Nisbets; Hipgnosis legal woes

Matt Britzman, equity analyst, Hargreaves Lansdown:

‘Bunzl’s the steady eddy you may never have given a second look. Far from a glamourous headline setter, Bunzl gets on with its business of selling essential goods and finding margin accretive acquisitions – and it’s very good at it.

‘There was some revenue weakness over the past year, a mix of volumes coming down in some geographies and normalising prices. A lot of Bunzl’s pricing is correlated with inflation, so as costs for the underlying raw materials come down so does Bunzl’s top line. The key thing to remember is revenue’s still around 28% higher than 2019 levels. Looking forward, volumes should come back but the pricing weakness is a potential headwind for the new year.

‘Strong cash generation and improving margins were highlights of last year. Acquisitions continue to do a lot of the work. There’s added risk with this approach, but in a heavily fragmented industry the deal pipeline is plump and Bunzl’s an expert at finding businesses with good margins at decent prices.

‘As a defensive growth business, there’s a lot to like. If Bunzl can contain the ongoing pricing weakness, then the pipeline of accretive acquisitions can do its job to prop up margins over the coming year.’

Investors will be encouraged to pledge more money towards female-led start-ups under plans backed by the Government.

Women founders receive just 2 per cent of all UK venture capital – a statistic that has remained stubbornly low.

Bunzl has bought catering equipment and consumables distributor Nisbets in the UK for £339million, the distribution group said on Monday as it warned operating margin this year would be slightly below 2023 levels.

The London-listed company said it witnessed a slower-than-expected start to the year in North America, but expected to deliver a slight growth in 2024 revenue helped by a slew of acquisitions made last year.

It also acquired Finland-based company Pamark, Bunzl said in a statement.

Heathrow has denied that it is shelving plans for a third runway as passenger numbers continue to swell.

Europe’s busiest airport has pushed back against reports that chief executive Thomas Woldbye wanted to scrap the expansion and was in the process of disbanding the team in charge of it.

In a statement last night, Heathrow said the claims, which were first reported by The Sunday Times, were ‘wrong’ and ‘not reflective’ of its strategy.

Britain’s competition watchdog has started an investigation into eight homebuilders after it found evidence that indicated potential sharing of commercially-sensitive information among competitors.

The Competition and Markets Authority said the sharing of sensitive information could be influencing the development of sites and the prices of new homes.

‘While the CMA does not consider such sharing of information to be one of the main factors in the persistent under-delivery of homes, the CMA is concerned that it may weaken competition in the market,’ the regulator said in a statement.

The companies include Barratt, Bellway, Berkeley, Bloor Homes, Persimmon, Redrow , Taylor Wimpey and Vistry.