LONDON: A number of acquisitions and favourable exchange rates pushed Bunzl’s revenue in the first three months of 2017 up 18pc, the firm said today. The distribution company’s overall trading was consistent with guidance it gave in February, it commented. Its revenue was up 18pc on the same period last year, although discounting currency movements the increase would only have been 4pc. Around 3pc of this came from acquisitions and new business.
“The underlying revenue growth is mainly due to the previously announced additional business won, albeit at lower margins, in North America towards the end of 2016,” Bunzl said. It has made five acquisitions already this year, spending £260m, which it hopes will add £330m of revenue to its total. The largest of these was the purchase of DDS, a US packaging supplier, which is waiting for sign-off from the Federal Trade Commission. The company said it still had “substantial funding headroom available”, giving it opportunities for further acquisitions in the coming months, it said.
Bunzl provides products from gloves and swabs to hospitals to hard hats and boots for construction sites. Its primary method of growth is by buying other companies, particularly in markets where it already operates. This allows it to rapidly grow its market share. The Daily Telegraph revealed earlier this week that Bunzl is facing concern over its pay packets for chief executive Frank van Zanten. Its shareholders today voted on a new remuneration policy that would increase the maximum cash bonus to 180pc of Mr van Zanten’s £800,000 salary, compared with 115pc under the existing structure. The plans sparked concerned from influential shareholder advisory group ISS, which said they were “not without concern”, although in the end just 7.84pc of shareholders voted against the changes. Shares in the company fell slightly this morning, dipping 1.33pc to £23.