Bunzl lifts margin view and starts new buyback after strong first half

Bunzl PLC on Tuesday reported underlying growth in all regions as it delivered interim operating profit ahead of market expectations.

The London-based distribution and outsourcing company said pretax profit climbed 16% to £290.4 million in the six months that ended June 30 from £250.1 million a year prior. Basic earnings per share improved by 18% to 65.7 pence from 55.6p.

Adjusted operating profit increased 8.9% to £440.6 million from £404.5 million, ahead of company-collated market consensus of £426 million, and adjusted EPS grew 13% to 87.7p from 77.8p.

Revenue rose 3.0% to £5.93 billion from £5.76 billion a year earlier, or 2.9% at constant currency.

Underlying revenue increased for a fifth consecutive quarter, with the 3.2% rise supported by both volume growth, led by North America, and selling-price inflation, driven by product-cost increases in the second quarter, Bunzl said.

Operating margin improved to 7.3% from 7.0%, driven by the net impact of inflation in the second quarter and supported by improved performance and annualisation of initial Nisbets synergies.

Bunzl took a 80% stake in Bristol, England-based distributor of catering equipment and consumables Nisbets for £339 million in 2024.

Bunzl said it continues to expect 2026 to be an improved year for acquisitions compared to 2025, with a "more active" second half as deal momentum is building and the pipeline "remains active".

The company boosted its interim dividend by 3.0% to 20.8p from 20.2p.

In addition, Bunzl announced a new £500 million buyback programme, to be completed over the next 12 months, although "high return" bolt-on acquisitions remain a priority. The first £250 million tranche of the buyback will start immediately.

Chief Executive Frank van Zanten said Bunzl put in a "strong" financial performance in the first half, with underlying growth in all regions and margin expansion, although he noted that the macroeconomic backdrop remains "uncertain with challenging end markets and volatile input prices".

The "robust" first half performance, "gives us the confidence to upgrade our guidance for 2026", the CEO said.

For 2026, Bunzl continues to expect modest underlying revenue growth after raising its outlook in June. But it now expects operating margin to be broadly flat year-on-year compared to slightly lower on-year before.

As a result, the company guided modest adjusted operating profit growth year-on-year, at constant exchange rates, from £910.3 million in 2025.

Shares in Bunzl were up 0.9% at 2,816.00 pence each in London on Tuesday morning, bucking a negative market trend. The wider FTSE 100 index down 1.2%.

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