Bunzl protects sales with masks, sanitisers orders

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Bunzl PLC (LON:BNZL) said strong sales of Covid-19 related products have more than offset the impact of weak economic activity on its business in the year to date.

Revenue in the second half of the year is expected to grow “strongly” while second-half operating profit margin should be “slightly higher” than last year.

READ: Bunzl target prices hiked at RBC, Barclays, JP Morgan and Credit Suisse following strong first half

The specialist international distribution and services group said the outlook remains uncertain, while larger Covid-19 related orders, such as masks, sanitisers, gloves and disinfectants, are expected to be more limited.

In the period since June 30, revenue rose 4%.

“Looking beyond the current year, we expect Bunzl’s underlying business to once again revert to tracking regional GDP trends – so we await economic recovery lifting sales across markets through financial year 2021, but also expecting some ‘stranded’ impacts with associated costs to be felt,” analysts at Shore Capital commented.

“Clearly some sectors, including hospitality, are initially set to emerge smaller with a longer-term recovery profile.”

“Bunzl has performed strongly through the difficulties of financial year 2020 and we expect relative performance to remain robust reflecting a ‘quality’ business model and management team.”

Shares advanced 4% to 2,657p on Wednesday at the opening bell.

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