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Interim Results

Bunzl hikes divi after strong first half

29 August 2017 07:29

Bunzl, the international distribution and outsourcing group, saw good increases at constant exchange rates in revenue, adjusted operating profit and adjusted earnings per share in the six months to the end of June.

Group revenue increased 20% to £4,119.2 million (2016: £3,446.8 million) and adjusted operating profit before customer relationships amortisation and acquisition related items was up 16% to £272.6 million (2016: £235.1 million).

Adjusted earnings per share were 55.1p (2016: 46.2p), an increase of 19%.

At constant exchange rates, revenue increased by 7% and adjusted operating profit rose by 4% with the group operating margin declining from 6.8% to 6.6%. Adjusted earnings per share were up 7%.

Return on average operating capital decreased to 54.3% from 55.9% at 31 December 2016 due to a lower operating margin and higher operating capital in the underlying business and the impact of a lower return on operating capital from acquisitions.

Return on invested capital of 16.4% was down from 16.7% at 31 December 2016 due to the effect of acquisitions and a lower underlying return on average operating capital.

The board has decided to increase the interim dividend by 8% to 14.0p.

Shareholders will again have the opportunity to participate in its dividend reinvestment plan.

Chief executive Frank van Zanten said: "Bunzl has once again delivered good increases in revenue, adjusted operating profit and adjusted earnings per share.

"I am particularly pleased to report a significant pick up in the level of organic revenue growth to 3.7% during the first half of 2017 following the previously announced new business win in North America last year.

"It is also good to see that acquisition activity, which continues to be an important part of our growth strategy, has accelerated in 2017.

"With four months of the year remaining, we are already at a record level of annual committed spend of £546 million including two larger businesses, being DDS in the US and the proposed acquisition of the Hedis group in France.

"Looking forward, we are confident that the prospects for the Group are positive and that the Company will continue to grow and develop further both organically and through acquisition."

Bunzl also announced that it had completed an acquisition in China.

Based in Shanghai with operations in four other provinces in eastern China, HSESF and its associated companies are principally engaged in the sale of a variety of personal protection equipment to local distributors and end users but also export products to customers overseas.

The aggregate revenue of the businesses acquired was £24 million in 2016.

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