FTSE-100 listed Bunzl’s shares hit four-year low on US concerns

Shares in support services giant Bunzl hit a four-year low after a profit warning, making the company the first FTSE 100 firm to halt a share buyback scheme since 2020.

March’s full-year results had already hinted at slowdown in its core business in the US, driving down the share price today.

Sales in the first quarter rose just 0.8% on a stated basis. Revenues advanced by 2.6% once currency movements are excluded but acquisitions added 5.7% to that figure, so the top line shrank on a strictly like-for-like, or underlying, basis.

“A profit warning and termination of a share buyback programme, the first such halt by any FTSE 100 firm since the dark days of Covid-19 and lockdowns, are both taking a heavy toll on shares in Bunzl and driving them to a four-year low,” says AJ Bell investment director Russ Mould.

“March’s full-year results had already got a cool reception owing to worries about a slowdown in the core US operations and a reliance on acquisitions for growth, and those issues have now come home to roost. The company has flagged slower-than-expected sales growth in the US and the UK and Ireland as well as the impact of these trends upon profit margins in 2025.

“That is not in keeping with chief executive officer Frank van Zanten’s statement alongside March’s results for last year that Bunzl would generate ‘robust’ sales growth in the year ahead. Sales excluding acquisitions and currency movements are now expected to come in broadly flat in 2025.”

The weak start to the year is also forcing the company to recant on its expectation that underlying operating margin would come in flat against 2024’s multi-year high of 8.3%. Management now expects a dip beneath 8.0%.

This suggests a downgrade to underlying profit forecasts for the year of some 5% to around £965 million, a fraction below the £976 million earned in 2024.