Bunzl shares climbed on Tuesday after the distribution-and-outsourcing group delivered steady half-year results, reassured investors with its 2025 guidance, and announced the resumption of its suspended share buyback program.
The stock rose by more than 5.3% to about 2,512 pence in opening London trade, making it the top performer on the FTSE 100 index and pushing the price to its highest level in three months.
Interim results steady despite profit decline
For the first six months of the year, Bunzl reported revenue of £5.76 billion ($7.75 billion), marking a 4.2% increase at constant currencies.
However, its operating margin slipped to 7.0% from 8.0% a year earlier, reflecting weakness in its large businesses in North America and Continental Europe.
Operating profit dropped 14% to £300.5 million, while pretax profit fell 10.5% to £250.1 million.
Even so, investors had braced for a second warning after operational challenges revealed in April, and the results were viewed as better than feared.
“Inline interim results and confirmed guidance is reassuring, especially as we expect investor forecasts are positioned slightly more cautiously than sellside in regard to margin,” Bernstein analyst Will Kirkness wrote in a note to clients.
“The print is being well received as investors considered a second warning more likely than not following the multifaceted operational challenges revealed in April which weighed on the stock,” RBC Capital Markets analysts Karl Green and Andrew Brooke said.
North American turnaround shows early progress
Chief Executive Frank van Zanten highlighted progress in Bunzl’s largest market, where actions to streamline operations and reduce costs have begun to show positive indicators.
“Actions taken in our largest business in North America have re-energised the team and we are seeing early positive indicators of success,” he said.
The company acknowledged that some of the benefits from these measures may not materialize until 2026 but said they were laying the groundwork for stronger long-term growth.
Management expects the second half of the year to show a moderated decline in operating margin compared with the first half as efficiencies take hold.
“There are developments in the turnaround of the distribution-and-outsourcing group’s US business and it confirmed its guidance for the year,” Kirkness said.
Share buyback and acquisitions boost confidence
Bunzl also said it would resume its share buyback, with plans to complete the remaining £86 million of its £200 million program during the second half.
The move is seen as a vote of confidence, particularly after the program was paused in April due to market uncertainty and weakness in North America.
Alongside the results, Bunzl announced two acquisitions: Guantes Internacionales, a personal protective equipment distributor in Mexico, and Quindesur, a Spanish supplier of foodservice and hygiene products.
These deals add to the group’s acquisition-led growth strategy.
The company declared an interim dividend of 20.2 pence per share, slightly above last year’s 20.1 pence.
With shares now down 24% for the year, the results and strategic moves have helped restore some confidence in the group’s ability to navigate operational challenges while positioning for long-term growth.
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