Bunzl PLC (LSE:BNZL) raised annual guidance as it reported a rise in interim profit alongside a modest increase in revenue.
The distribution specialist said in the six months to 30 June 2023, pre-tax profit climbed 6.9% to £317.1 million from £296.6 million the year before with revenue up 4.5% to £5.91 billion from £5.65 billion.
“As a result of our successes over the period, we are upgrading our 2023 adjusted operating profit guidance, supported by a meaningful increase in our operating margin expectations,” said Frank van Zanten, chief executive officer.
Bunzl now expects adjusted operating profit to be moderately higher than in 2022 at constant exchange rates, with operating margin remaining strong and moderately higher than that achieved in the prior year.
At constant exchange rates, revenue in 2023 is expected to be slightly higher than in 2022, driven by acquisitions, partially offset by a slight organic decline.
Revenue in the first half was supported by a strong performance in continental Europe, up 12.4%, and the Rest of the World, up 7.6%, offset by declines in North America, down 2.9%, and UK & Ireland, down 3.7%.
First-half operating margin growth to 7.4% from 7.3% was supported by margin management initiatives, including increasing penetration of own brand, Bunzl said.
The dividend was raised 5.2% to 18.2p.
Bunzl also announced it had signed an agreement to buy a business in Poland and one in the Netherlands for an undisclosed sum.
"We have significant headroom to continue to self-fund value-accretive acquisitions and our pipeline remains active," van Zanten commented.