Distribution and outsourcing company Bunzl PLC (LON:BNZL) said it has completed its first acquisition in China as it reported growth in first half revenues and profits.
Bunzl has bought Shanghai-based HSESF, which sells personal protection equipment, bringing the number of acquisitions in the year to date to 11 with a total spend of £546mln, the company said in a statement.
"With annual revenue flow currently of £24mln, this is a small but strategically important deal for the group and should be welcomed by the investment community, in our view," said analysts at Shore Capital.
READ: Bunzl sees first half revenue rising 7% boosted by acquisitions
Other acquisitions include Diversified Distribution Systems in the US and a group of businesses in France, including Hedis, Comptoir de Bretagne and Générale Collectivités.
The group’s expansion gave first half results a boost with revenue rising 7% at constant currencies or 20% on a reported basis to £4.1bn compared to the same period a year earlier.
More than 85% of the group's revenue is generated outside the UK so a weaker pound against most currencies had a positive impact on the group's reported results.
Organic revenue edged up 3.7%, supported by a major business win in North America last year.
Growth across all business units
The North America division saw revenue increase 7% to £2.4mln at constant exchange rates, accounting for 59% of total revenue.
Continental Europe revenue rose 9% to £769.0mln as growth in Spain offset a marginal sales decline in its cleaning and hygiene unit in France.
The UK & Ireland climbed 7% to £566.1mln with an improvement in food retail following the loss of an account last year and non-food lifted by the acquisition of packaging products supplier, Woodway. The division was also supported by growth in hospitality from contract wins and expansion of business with existing customers.
However, sales in its UK safety business fell due to a subdued marketplace for major capital infrastructure projects and investment while healthcare was weighed down by difficult market conditions.
The rest of the world arm grew 2% to £251.5mln, lifted by recovery in Brazil, an improvement in market conditions in Australasia and expansion in Asia with acquisitions in Singapore and China.
Adjusted pre-tax profit totalled £248.3mln, up 5% at constant currencies or 18% on a reported basis.
Dividend lifted as Bunzl sounds confident note on outlook
The company raised its interim dividend by 8% to 14p.
“Looking forward, we are confident that the prospects for the group are positive and that the company will continue to grow and develop further both organically and through acquisition,” said chief executive Frank van Zanten.
READ: Bunzl unveils four acquisitions and predicts higher first-half revenue
Shore Capital said it believes Bunzl retains a "significant pipeline and opportunity for continued acquisitive growth with the balance sheet remaining robust". The broker left its rating at 'hold', saying that the foreign exchange benefits in the first half are likely to to have a more subdued positive effect on second half results.
Shares dipped 0.83% to 2,315p in morning trading.