Shares in distribution and services group Bunzl (BNZL) tumble 12% to £22.30 on Wednesday after the company reveals that trading has slowed sharply since the start of the year.

In its first quarter trading update the firm reported that revenues were up just 2.5% adjusting for the number of trading days with underlying growth of just 1.5%.

That marks a significant slowdown from 2018 when Bunzl reported full year revenues up 6% with underlying growth of over 4%.


The main cause of the slowdown is North America where the company makes 58% of its sales and 50% of its operating profit.

Underlying revenue growth in North America was just 1% in the first quarter due to ‘slightly lower sales to customers in the grocery and retail sectors, principally due to the lack of both volume growth and product price inflation.’

That compares with underlying revenue growth of more than 4% last year thanks to ‘significant additional grocery business won’.


The additional grocery business wasn’t fully absorbed until the second quarter of last year so in theory the comparison with last year’s first quarter should have been fairly easy, but that clearly wasn’t the case.

The fact that the second quarter last year includes all the new business wins means the comparison will be harder so underlying revenue growth this quarter could be even weaker than the first quarter.

Elsewhere the company says it experienced ‘good growth’ in the safety, processor, agriculture and convenience store sectors in the US, but sales in the UK, continental Europe and rest of the world were up just 2% on an underlying basis which compares poorly with the 4% growth registered last year.

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Issue Date: 17 Apr 2019