Bunzl PLC (LSE:BNZL) has continued on its merry acquisitive way in 2024 seemingly oblivious to external forces that have tripped up others.
More reassuring noises are expected with its end-of-year trading update next week.
Having hit an all-time in September, the share price of the FTSE 100 plastic disposables group has retreated recently but history suggests this type of pause tends to be temporary in Bunzl’s case.
Inflation both input and output has been an issue as have volumes and any indication that the US is picking up would be welcome, says Hargreaves Lansdown.
Acquisitions are expected to do all the heavy lifting on the top line this year, adds HL, with underlying revenue on track for a small decline.
In the third quarter, overall revenues rose by 6.8% but organic growth was a negative 1.2%.
Deutsche Bank, meanwhile, expects a return to 2.5% a year organic growth in 2025, as recent US volume softness and deflation ends, on top of any acquisition boost.
“We expect margin progression from acquisitions, greater own-brand (c.27% of revenues in H1 24), and operational efficiencies.”
Bunzl intends to spend around.£700m pa on acquisitions or buybacks in the financial years to 2027, but Deutsche Bank sees scope for this to be beaten.
On top of the £250 million buyback this year, Deutsche Bank expects at least a further £200 million in 2025 and £250 million in 2026.