News Column

Bunzl Reiterates Forex Hit, Makes Acquisitions In Brazil, Netherlands

June 25, 2014

Samuel Agini

LONDON (Alliance News) - Bunzl PLC Wednesday said it expects to report 6% revenue growth at constant exchange rates for the first half of 2014, due to underlying revenue growth of about 2% and an uplift from acquisitions, but reiterated its reported results at actual exchange rates will be hit by foreign exchange fluctuations.

Adding that overall trading is consistent with expectations at the time of its last interim management statement in April, Bunzl said in its pre-close trading statement that it expects all of its business areas to show positive underlying revenue growth and improved operating margins in the six months ending June 30.

In addition, Bunzl said that it has made two new acquisitions, as it looks to give a boost to its safety business in the Netherlands and expand its cleaning and hygiene supplies business in Brazil.

Bunzl said it has acquired Allshoes Benelux BV in the Netherlands. It said that the business distributes both branded and own-brand safety and work shoes to a variety of wholesalers as well as to retailers, mainly in the Netherlands but also in Belgium. In 2013, it reported EUR19.9 million in revenue.

Meanwhile in Brazil, Bunzl said it has acquired JPLUS ComÉrcio e DistribuiÇÃo Ltda, a company that distributes cleaning and hygiene supplies and disposable products to a variety of end user customers, particularly in the contract cleaning and healthcare sectors. JPLUS pulled in BRL39.3 million in revenue in 2013.

"The acquisition of Allshoes is an important development for our safety business in the Netherlands as it extends our product range in the safety shoe sector and will provide cross selling opportunities with Majestic, our existing personal protection equipment business in the Benelux region which specialises in the supply of gloves and workwear," Chief Executive Michael Roney said in a statement.

"JPLUS will expand the geographical coverage of our cleaning and hygiene supplies business in Brazil, having entered this sector there with the acquisition of Ideal in 2011. We are delighted to welcome the employees of both businesses to Bunzl," the CEO added.

Bunzl said that its strong cash flow, balance sheet and promising acquisition opportunities should enable it to consolidate the markets in which it competes and increase shareholder value.

Bunzl said that it has a promising pipeline of further acquisition opportunities, adding that it has now spent about GBP95.0 million on acquisitions in the year to date.

At the stage of its previous interim management statement, published on April 16, Bunzl's CEO had said: "Acquisition activity has continued at a good pace during the first quarter of the year with six acquisitions completed for a total committed spend of GBP80 million."

Bunzl shares were Wednesday quoted at 1,590.00 pence, down 2.5%.

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Source: Alliance News

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