FTSE 100 distribution and outsourcing group Bunzl said that its 'significant' levels of investment helped to boost revenues in 2012, though foreign exchange rates put a dampener on reported growth.
Revenues increased by 5.0% from £5.11bn to £5.36bn last year, helped by good organic growth and the committed acquisition spend of £272m which added record annualised revenue of more than £500m.
The firm, which supplies a range of products such as food packaging, catering equipment and healthcare consumables, announced 13 transactions during the period, spending the most on acquisitions since 2004.
Subscribe to MoneyWeek
Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE
Sign up to Money Morning
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
Bunzl registered strong revenue growth in both North America and Continental Europe - though the latter reported a decline in gross margin owing to the "difficult economic environment - but sales in UK and Ireland were flat due to the impact of the sale of the vending business in August 2011. Nevertheless, the company said that it was able to achieve underlying growth in spite of "suppressed" demand in the region.
However, the firm said that translation effects of the weaker euro and other currency movements offset a stronger US dollar, meaning that growth rates of revenue and operating profit were affected. At constant exchange rates (CER), the top line rose 6.0% year-on-year.
Operating profit (CER) increased by 7.0% from £336m to £352m in 2012, helped by a 10 basis-point improvement in the group operating margin to 6.6%.
Profit before tax (CER) rose 8.0% from £306m to £324m, but basic earnings per share surged by 57% from 38.2p to 59.9p, as 2011 has significantly affected by the loss on the disposal of the vending business.
The full-year dividend was raised by 7.0% to 28.2p per share. Meanwhile, net debt increased by £85m to £738m over the year mainly due to acquisitions.
"I am pleased to report another good set of results for Bunzl due to a combination of organic revenue growth, good performance from the acquisitions made in 2011 and significant acquisition spend in 2012," said Chief Executive Officer Michael Roney.
"While the macroeconomic outlook remains challenging, particularly in Europe, we believe that our strong market position, growing and resilient customer base and the promising pipeline of opportunities for additional market consolidation will provide the group with a good platform for further growth."
-
Coventry Building Society bids £780m for Co-operative Bank - what could it mean for customers?Coventry Building Society has put in an offer of £780 million to buy Co-operative Bank. When will the potential deal happen and what could it mean for customers?
-
Review: Three magnificent Beachcomber resorts in MauritiusMoneyWeek Travel Ruth Emery explores the Indian Ocean island from Beachcomber resorts Shandrani, Trou aux Biches and Paradis
