Shares in distribution and services firm Bunzl (BNZL) fell 2.5% to £26.14 as a drop-off in pandemic-related business and warnings on staff and materials shortages soured sentiment.
The share price fall came despite ongoing recovery in its base business, which excludes Covid-related products such as masks, sanitisers, and gloves, boosting performance.
For the six months ended 30 June, pre-tax profit rose 12.3% to £275.7 million year-on-year as revenue increased 0.4% to £4.87 billion.
The North American business, which makes up 59% of total revenue, reported underlying revenue growth of 10.6% driven by continued recovery and product inflation although certain Covid-19 related products started to experience deflation in the second quarter
An interim dividend of 16.2p per share was declared, up 2.5% from a year earlier.
ROBUST GUIDANCE
Looking ahead to the rest of fiscal 2021, the company continued to expect, at constant exchange rates, underlying revenue to be ‘moderately higher than the pre-pandemic period in 2019,’ the company said.
'Acquisitions will further contribute to growth, with £134 million committed spend year to date, and an active pipeline supported by substantial financial headroom,' Bunzl added.
Shore Capital analyst Robin Speakman commented: ‘This is a resilient performance as set out in the statement, confirming Bunzl’s well-understood attributes, in our view.
‘The business continues to solidly support its clients’ needs through cycles and market events as a committed and reliable partner and we believe that it is this which underpins its existing solid relationships and steady underlying growth prospects.’
