Bunzl backs annual outlook but revenue growth slows in third quarter

Bunzl PLC on Tuesday said it continues to expect 2026 to be a "foundation for future profit growth" as it reiterated full-year guidance after a "good performance" in the third quarter.

The London-based distribution and outsourcing company said revenue in the quarter grew by 3.1% at constant exchange rates and broadly the same at actual exchange rates.

Underlying revenue increased by 3.7%, supported by both inflation, including year-on-year product cost increases, and volume growth, which continues to be driven by a strong performance in the North America distribution business. Growth was slower than 4.4% posted in the second quarter of 2026 but faster than 2.0% in the first three months of the year.

Acquisitions contributed 0.4% to revenue growth, while fewer trading days in the period impacted revenue by 1.1%. Operating margin was in line with expectations for the period.

Bunzl reiterated its full year outlook after upgrading guidance for operating margin and operating profit alongside half-year results in September. It had lifted its revenue outlook in June.

The FTSE 100 listing continues to expect modest underlying revenue growth, from £11.84 billion in 2025, supported by some inflation, alongside a small benefit from acquisitions.

Operating margin for the year is expected to be broadly flat year-on-year compared to the 7.6% operating margin reported in 2025. It continues to expect net adjusted finance expense of £125 million to £130 million and a full year effective tax rate of around 26%.

RBC Capital Markets analyst Karl Green said that "those hoping for a margin upgrade today on sticky inflation could be a tad disappointed".

Shares in Bunzl were down 3.1% at 2,722.00 pence each in London on Tuesday morning.

Chief Executive Frank van Zanten said: "We continue to expect 2026 to be a foundation for future profit growth and we are confident that the strengths of the Bunzl model, with our scale advantage, entrepreneurial culture, strong cash generation and balance sheet, will deliver consistent compounding growth in the medium-term."

Bunzl said it has completed the acquisition of Blueleaf Care, announced earlier this month. It said the distributor of care and nursing home products is "highly complementary to our existing business" and generated revenue of £58 million in 2025.

The £500 million share buyback programme announced at the half year is progressing with £225 million of the programme now completed.

Bunzl said it continues to prioritise value-accretive bolt-on acquisitions and retains appropriate balance sheet headroom to fund acquisition opportunities.

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