The FTSE 100-listed Bunzl PLC (GB:BNZL) raised its annual profit outlook in its pre-close statement for the full year 2023. The company expects another positive year, with adjusted operating profit set to slightly surpass previous guidance. Additionally, the company announced three new acquisitions, bringing the total number for this year to 17. In the last four years, the company has spent around £1.7 billion on acquisitions, indicating an increased level of investment.
The Bunzl share price went up by over 2% in early trading hours and is currently at a gain of 1.15%. The stock value has grown by around 15% so far in 2023.
Bunzl is a distribution company offering products and solutions across sectors such as healthcare, grocery, hygiene, and more. The company operates in the U.S., Europe, the UK, and the Asia-Pacific region.
Positive Outlook Driven by More Acquisitions
In November, Bunzl completed two acquisitions, enhancing its current offerings to customers. The first acquisition was that of Melbourne Cleaning Supplies, based in Australia and boasting an annual revenue of £10 million in 2022. The company also bought U.S.-based Flexpost, generating a revenue of £3 million.
In December, Bunzl acquired Miracle Sanitation Supply in Canada, expanding its presence in the region with the potential for an annual revenue of £7 million.
The anticipated revenue growth from such acquisitions is expected to balance out the projected decline in the underlying revenues of the company. Bunzl’s revenues are mainly hit by reduced sales of COVID-19-related products and diminishing advantages gained from inflation, especially in North America.
The revenue for the full year is expected to remain largely consistent with the previous year’s figures, excluding the disposal impact of the company’s UK healthcare business. Taking into account the disposal, the company’s 2023 revenue is projected to be 1-2% lower than in 2022 at constant exchange rates.
The company will publish its annual results on February 26, 2024.
Is Bunzl a Buy or Sell?
According to TipRanks, BNZL stock has garnered a Hold consensus rating based on two Buys, two Sells, and one Hold recommendation. The Bunzl share price target of 2,975 is 5.5% lower than the current trading level.
It is important to note here that these ratings were updated in the last month and could potentially change in response to the recent profit upgrade.
