Bunzl (GB:BNZL) published its half-year results for 2022 amid strong recovery in business volumes and rapid growth from acquisitions.
The company’s revenue increased by 16% to £5.7 billion – and the company, which distributes products including latex gloves, workwear and food packaging, is further on track to expand its operations with six acquisitions announced so far in 2022.
The adjusted operating profit grew by 12.2% to £411.4 million.
This reflected the company’s ability to withstand inflationary pressures: Bunzl has revised its margin guidance for 2022 to be higher, but a little lower than the margins reported in 2021.
The company also announced an increase in its interim dividend by 6.8% to 17.3p per share, as compared to 16.2p in the first half of 2021.
The good performance and the growth in dividends didn’t help the stock, which went down around 6.5% in one day after the results.
Expert Views
Victoria Scholar, head of Investment at Interactive Investor, said, “Shares in Bunzl are trading lower after its first-half earnings report disappointed investors. Although it raised its operating margin outlook, it is still expected to fall in the full year versus 2021. The stock initially slumped to the bottom of the FTSE 100, shedding more than 5 percent, but has since pared some of those losses.
“Global geopolitical uncertainty and equity market turmoil weighed on the stock between April and June, but since the lows, Bunzl has enjoyed a strong uptrend, rallying by more than 20 per cent. Shares are giving back some of those gains today.”
What is Bunzl as a company?
Bunzl is a UK-based distribution and services group serving customers in 31 countries across the world.
The company supplies food packaging and disposables, cleaning and hygiene supplies, stationery, and more to retail stores, hospitals, restaurants, and other companies.
The company is known for its environmental awareness: the majority of its products are recyclable and reusable.
Is Bunzl a good buy?
According to TipRanks’ analyst rating consensus, Bunzl stock has a Hold rating. It includes five Hold, three Buy, and one Sell recommendations.
The Bunzl target price is 2,923.13p, which represents a slight change of 0.12% on the current price level. The price target has a low and a high forecast of 2,250p and 3,500p, respectively.
Conclusion
Bunzl stock fell on yesterday’s news, but there are promising aspects to this week’s numbers, analysts believe.
