Bunzl PLC (LON:BNZL) announced the acquisition of Norwegian firm Enor AS as it reported a 4% increase in pre-tax profit for the first half.
The distribution and services group has agreed to buy Enor, which supplies catering equipment to hotels, restaurants and hospitals, for an undisclosed sum.
Enor, Bunzl's first acquisition in Norway, generated revenue of NOK294mln (£27mln) last year.
Acquisitions boost revenues
Bunzl, which purchased a record number of businesses last year, said growth through acquisitions remains part of its strategy, albeit at a slower pace this year.
It has set aside £132mln for acquisitions this year and has bought four businesses so far, including Enor. Bunzl also sold two non-core businesses, including French unit OPM and the UK marketing services business.
READ: Bunzl eyes further acquisitions and sells non-core business
The company said the benefit of recent acquisitions offset the negative impact of disposals, resulting in a 5% increase in revenue to £4.3bn in the six months to June 30, compared to £4.1bn in the year-ago period. Organic revenue increased 5.2%.
Adjusted pre-tax profit edged up to £257.9mln from £248.3mln last year.
The strengthening of the pound against the dollar had an adverse impact on its results, given that North America accounts for 57% of total revenue. At constant exchange rates, revenue grew 12% and adjusted pre-tax profit gained 10%.
Positive outlook
“Looking forward to the rest of the year, the board is confident that the prospects for the group are positive and that the company will continue to develop the business and build shareholder value through a combination of organic growth and further acquisitions as the year progresses,” said chief executive Frank van Zanten.
The group declared an interim dividend of 15.2p, up 9% on last year’s 14.0p payout.
In morning trading, shares rose 2.2% to 2,382p.
"Shares in non-food consumables distributor Bunzl are trading their best in 14 months after management published a positive set of H1 results and expressed confidence in the rest of the year," said Mike van Dulken, head of research at Accendo Markets.
"Income seekers have welcomed profits growth of 10% allowing for a similarly generous 9% hike in the interim dividend while the company continued to expand, with its first acquisition (albeit very small) in Norway building on its Scandinavian presence and extending its reach to 31 countries worldwide."