The FTSE 100 group, which supplies businesses with a vast range of products ranging from coffee cups, rubber gloves and hard hats to cleaning products, packaging and labels, said underlying organic revenue growth has slowed to just 1% in the half-year, from 1.5% in the first quarter, with a similar net impact from acquisitions and disposals completed in the previous year.
Total revenue was up 4% for the first six months of half 2019, which takes account of the benefit from currency swings and a different number of trading days.
In April Bunzl had warned of slowing growth at the start of the year, particularly in its biggest market of North America, and said the rate of underlying revenue growth had slowed during that quarter.
For the full calendar year, the board said its expectations “remain unchanged with overall trading consistent with the slowing underlying revenue growth indicated at the time of the first quarter trading statement”.
So far this year roughly £100mln of spending has been committed to acquisitions, with the pipeline for further purchases said to remain “active” and ongoing discussions are taking place with the aim of completing further transactions during the rest of the year.
Bunzl shares were down 1.3% to 2,118p by lunchtime on Wednesday.
Broker Shore Capital, which has a 'buy' rating on the shares, saw the update as "positive", with trading overall "slightly ahead of our model on an underlying like-for-like basis", but the level of acquisitive activity has been at a "noticeably lower" level so far this year.
ShoreCap said the 2% underlying growth, combining organic and acquisitions, compared to the broker's modelled estimate of 1.6%, and while no commentary was given by the company on margin performance, the broker said "we expect little change here in the period".
"The organic performance reflects the stronger growth seen in North American grocery through FY2018, with the like-for-like performance annualising. We believe that underlying growth trends outside North America are more in-line with recent historic performance, maintaining a ‘GDP+’ growth profile."
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