Management maintain their expectations for the year but also pointed to slowing conditions within their sector
Bunzl’s results remain solid while acquisition talks continue
- Rising revenues and profits for first half of 2019.
- Company continues to be in active discussions with a number of acquisition targets.
- We maintain our ‘buy’ recommendation for investors willing to accept a lower level of risk.
The distribution and outsourcing giant’s results have started a quiet week of companies reporting on a steady note, with revenue rising by 4.3% at £4.53b and profits increasing slightly to £200.5m. While management maintain expectations for the year, the CEO pointed to slowing macroeconomic and market conditions in areas in which it operates, describing the group’s performance as resilient.
The company also stated it has spent £98m so far this year on acquisitions and hopes to be boosted by a further pipeline of deals. The shares generally regarded as being defensive, have been under pressure since April on the back of fears over slowing revenue growth, and are down 3% in early morning trading and are close to a two year low.
Our view on Bunzl - Buy
Long-term attractions remain but the shares are unlikely to get the pulse racing over the shorter term and we continue to recommend these shares as a ‘buy’ for investors willing to accept a lower level of risk.
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