Interactive Investor has turned more constructive on Bunzl (LSE:BNZL) after the non-food consumables distributor upgraded its full-year outlook, with Head of Markets Richard Hunter describing the update as an attempt to "steady the ship" following a prolonged share-price decline.
Hunter argues that North America, which had been the primary source of investor anxiety, is showing signs of recovery, with most of the group's current volume growth now coming from that region, supported by new contract wins secured at the end of last year.
For the first half, Bunzl expects group revenue growth of 4%, with acquisitions contributing roughly 1 percentage point, while full-year operating margin is still guided to decline modestly; the April addition of Australian distributor Scientifix Group is expected to add £9 million in revenue, extending a run of eight acquisitions last year for a combined £132 million.
Hunter notes that much of the damage to Bunzl's valuation has already materialised, with the shares down 18% over the past two years as sales weakness, product price deflation and costs from its own-branded rollout weighed on sentiment, leaving the upgraded adjusted operating profit guidance to do the repair work.
