Bunzl, a leading supplier of disposable paper and plastic packaging supplies in the UK, today raised its annual group operating margin outlook, after benefiting from demand for its cheaper, high-margin products from inflation-hit customers.
The group, that also supplies food packaging, latex gloves, work wear and stationery to businesses, said its first-half performance was boosted following the volume recovery as well as acquisition-led growth.
Bunzl’s adjusted pre-tax profit grew 12.2 per cent on the same time last year to £411.4million in the six months to 30 June, with revenues up 16.1 per cent at £5.7billion.
However shares in Bunzl are trading lower after its first half earnings report disappointed investors. Although it raised its operating margin outlook, it is still expected to fall in the full year versus 2021. The stock initially slumped to the bottom of the FTSE 100, shedding more than 5% but has since pared some of those losses.
Head of investment at interactive investor Victoria Scholar said: ‘The supplies distributor enjoyed a boost in demand for its products during the pandemic but has since struggled during the post-Covid economic normalisation.
‘The global geopolitical uncertainty and equity market turmoil weighed on the stock between April and June but since the lows, Bunzl has enjoyed a strong uptrend, rallying by more than 20%. Shares are giving back some of those gains today.’