We don’t support this browser anymore.
This means our website may not look and work as you would expect. Read more about browsers and how to update them here.

Skip to main content
  • Register
  • Help
  • Contact us

Bunzl plc (BNZL) Ordinary 32 1/7p

Sell:3,252.00p Buy:3,254.00p 0 Change: 27.00p (0.84%)
FTSE 100:0.12%
Market closed Prices as at close on 20 February 2024 Prices delayed by at least 15 minutes | Switch to live prices |
Sell:3,252.00p
Buy:3,254.00p
Change: 27.00p (0.84%)
Market closed Prices as at close on 20 February 2024 Prices delayed by at least 15 minutes | Switch to live prices |
Sell:3,252.00p
Buy:3,254.00p
Change: 27.00p (0.84%)
Market closed Prices as at close on 20 February 2024 Prices delayed by at least 15 minutes | Switch to live prices |
The selling price currently displayed is higher than the buying price. This can occur temporarily for a variety of reasons; shortly before the market opens, after the market closes or because of extraordinary price volatility during the trading day.

HL comment (14 December 2023)

Bunzl expects full-year revenue to be 1-2% lower than the prior year, ignoring exchange rates. Revenue growth from acquisitions is expected to be offset by lower COVID-19 related sales and reduced inflation benefits.

Profit guidance was nudged slightly higher. Underlying operating profit is expected to deliver moderate growth, with margins now expected sightly ahead of previous levels.

For 2024, Bunzl is expecting some revenue growth. That'll be driven by acquisitions and a small contribution from organic growth. Operating margin is expected to remain in line with 2023 levels.

There were three new acquisitions announced, taking the total this year to 17.

The shares rose 1.6% in early trading.

Our view

A small uptick in profit guidance was welcome news, as was new commentary suggesting there could be scope for some organic revenue growth next year.

Bunzl's a mashup of around 150 distribution businesses, which source and deliver a range of essential products. There's nothing fancy about the products on offer, think food packaging and safety equipment. But that's what we like about the product range, these are things customers can't go without. Overall we retain the view that Bunzl's an attractive business, but there are some things to monitor.

Recent organic performance has been a struggle. Falling inflation is pulling sales down and normalising sales from Covid related products across geographies are a drag. The latter should normalise as we move through 2024 and comparable periods ease. The exact timing of this is tough to map though.

Aside from organic growth, it's acquisitions that take centre stage. Around two thirds of the revenue growth over the last 10 years has been a result of adding new businesses to the portfolio. Acquisitions spend has been increasing in recent years and a healthy pipeline support continued growth from this avenue.

Acquisition-led strategies have their drawbacks. If the pool of target companies dries up or a business needs to raise external cash to fund acquisitions, then it's not usually sustainable. Bunzl's got the latter covered though. Cash conversion (how much operating profit feeds through to cash flow) is a key strength, coming in at over 100% in each of the last 4 years. As is the balance sheet, where leverage has significantly dropped in recent years. We think there could be scope for buybacks if things continue, though acquisition spend will likely take priority.

We're mindful that there could be some further declines before things stabilise, especially around raw material pricing. But we've been genuinely impressed by Bunzl's margin performance. There aren't too many companies that can see revenue drop and improve operating profit guidance.

Overall, we think Bunzl has much to offer. We're supportive of the resilient portfolio and highly cash-generative model. The key thing to watch is how organic growth plays out from here, prolonged weakness in this area puts added pressure on acquisitions to do the hard work. The valuation's below the longer-term average, reflecting those concerns.

Bunzl key facts

  • Forward price/earnings ratio (next 12 months): 16.9
  • Ten year average forward price/earnings ratio: 18.3
  • Prospective dividend yield (next 12 months): 2.2%
  • Ten year average prospective dividend yield: 2.2%

All ratios are sourced from Refinitiv. Please remember yields are variable and not a reliable indicator of future income. Keep in mind key figures shouldn't be looked at on their own - it's important to understand the big picture.

Sign up for updates on Bunzl

This article is original Hargreaves Lansdown content, published by Hargreaves Lansdown. It was correct as at the date of publication, and our views may have changed since then. Unless otherwise stated estimates, including prospective yields, are a consensus of analyst forecasts provided by Refinitiv. These estimates are not a reliable indicator of future performance. Yields are variable and not guaranteed. Investments rise and fall in value so investors could make a loss.

This article is not advice or a recommendation to buy, sell or hold any investment. No view is given on the present or future value or price of any investment, and investors should form their own view on any proposed investment. This article has not been prepared in accordance with legal requirements designed to promote the independence of investment research and is considered a marketing communication. Non-independent research is not subject to FCA rules prohibiting dealing ahead of research, however HL has put controls in place (including dealing restrictions, physical and information barriers) to manage potential conflicts of interest presented by such dealing. Please see our full non-independent research disclosure for more information.


Previous Bunzl plc updates

Data policy - All information should be used for indicative purposes only. You should independently check data before making any investment decision. HL cannot guarantee that the data is accurate or complete, and accepts no responsibility for how it may be used.

The London Stock Exchange does not disclose whether a trade is a buy or a sell so this data is estimated based on the trade price received and the LSE-quoted mid-price at the point the trade is placed. It should only be considered an indication and not a recommendation.

Trades priced above the mid-price at the time the trade is placed are labelled as a buy; those priced below the mid-price are sells; and those priced close to the mid-price or declared late are labelled 'N/A'.