Bunzl revenues to rise after US business boost
Outsourcing firm Bunzl said revenues were enjoying a boost from new business in the US as it sealed a string of overseas acquisitions.
The FTSE 100 company said half-year revenues would lift by 7% at constant currency, with underlying growth rising 3% to 4% thanks to extra work secured in America last year.
Shares soared 4% in morning trading as the company also announced deals for three businesses in Spain and Canada.
Chief executive Frank van Zanten said trading was in line with expectations and it was on track to snap up more firms this year.
He said: "The acquisition of Tecnopacking has further extended our operations in Spain which have grown significantly in recent years with total annualised revenue now approaching 200 million euro (£177 million).
"We have also seen rapid growth in Canada with the purchase of AMFAS and Western Safety bringing the total number of businesses acquired there since the beginning of 2015 to nine."
Bunzl, which supplies food packaging to restaurants and hotels and shopping bags to the retail sector, has bought eight firms for around £290 million this year, adding £370 million to revenues.
It said Valencia-based Tecnopacking, which distributes industrial packaging throughout Spain and Portugal, recorded revenues of 38 million euros (£34 million) last year.
Protection equipment suppliers AMFAS and Western Safety had combined revenues of 16 million Canadian dollars (£9 million) for the period.
Russ Mould, AJ Bell investment director, said: "Bunzl supplies the things that other firms need in order to do business; but not items they would sell to their customers. For example, it supplies disposable coffee cups to cafes and food wrap to supermarkets to safety equipment and syringes for hospitals.
"It also supplements organic growth with bolt-on acquisitions - nothing too big, nothing too transformational or risky - and then improves the performance of the purchases, leading to increased profitability and cash flow. All of the deals are self-funded.
"The net result is Bunzl is one of just 27 FTSE 100 firms to have increased its dividend for all of the last 10 years consecutively (and its streak of increases actually stretches back 24 years)."