Consumer products distributor Bunzl PLC (LON:BNZL) has reassured shareholders its ability to service its customers' needs is unlikely to be affected materially by Brexit.
In the commentary accompanying its results for 2018, the group predicted the main risks from the Brexit fall-out would be foreign exchange volatility, the imposition of trade tariffs and supply chain disruption at the ports.
Bunzl: 26 years of dividend growth. FY pre-tax profit up 4% to £424.8m. Operating margins slip in North America and UK/Ireland, but grow in RoW and Continental Europe. Overall looks like business as usual. #BNZL $BNZL
— Daniel Coatsworth (@Dan_Coatsworth) February 25, 2019
The board also flagged an area of emerging risk that it is addressing, relating to the increase in legislation and changes in consumer preferences discouraging the use of certain single-use plastic products.
It said the group’s “scale and unique position at the centre of the supply chain” should mean it is well placed to provide alternative products as its customers move away from single-use plastic items.
As for last year’s trading performance, revenue rose 6%, or 9% on a constant currency (CC) basis, to £9.08bn from £8.58bn in 2017.
Profit before tax rose 4% to £424.8mln in 2018 from £409.3mln the year before.
The full-year dividend was bumped up 9% to 50.2p from 46p.
“The strength, resilience and reliability of our consistent business model and strategy, together with the compounding effect of our ability to reinvest our strong cash flow to take advantage of market consolidation opportunities, have enabled Bunzl to produce a strong long term performance,” declared Frank van Zenten, the chief executive officer of Bunzl.
Talking of “consolidation opportunities”, the company announced the acquisition of US firm Liberty Glove & Safety for an undisclosed sum.
The acquired company sells a full range of personal protection equipment, principally gloves, to distributors throughout the US.
Shares in Bunzl were down 1.2% at 2,508p in early deals.