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(Sharecast News) - International distribution group Bunzl reported a rise in annual earnings, driven by product cost inflation, volume recovery in the first half and growth from acquisitions.
Pre-tax profit for 2022 rose 11.6% to £634.6m, as revenue grew 9.8% at constant exchange rates to £12bn. Shareholders were rewarded with a 10% rise in the total dividend to 62.7p a share.
Bunzl also revealed it had bought a business in Germany and completed the acquisition of another in Canada.
The company on Monday said it had signed a deal to buy Arbeitsschutz-Express, an online distributor of workwear and PPE in Germany, which generated €41m (£35 million) of revenue last year and also completed the acquisition of Capital Paper, a Canadian distributor of foodservice packaging and consumables, cleaning & hygiene supplies, and industrial packaging products.
Shares in the company gained on the news, which emphasised Bunzl's "key virtues: a strong competitive position; the careful use of acquisitions to add to the company's organic momentum; and a consistent record of increased dividend payments" said AJ Bell investment director Russ Mould.
"These attributes result in the stock trading on a big premium to the FTSE 100 on an earnings basis and a discount on a yield basis, according to consensus analysts' forecasts, as investors seem prepared to pay up for the relative dependability that it offers."
"Bunzl trades on around 20 times forward earnings and a yield of 2.1% for 2023, compared to 11 times earnings and a 4% yield for the FTSE 100 overall."
Reporting by Frank Prenesti for Sharecast.com
