Bunzl makes first foray into Norway and tips further takeovers as profits rise
The FTSE 100 firm released its half-year results on Tuesday.
FTSE 100 firm Bunzl has made its first foray into the Norwegian market after snapping up a local catering supplies firm, and said further takeovers are on the cards after logging an 8% jump in profits.
The outsourcing and distribution firm announced on Tuesday that it had acquired Oslo-based Enor, which supplies light catering equipment to the likes of hotels, restaurants, hospitals and fast food chains.
The terms of the deal were not disclosed, but Bunzl said Enor logged £27 million in revenue in the year to December 31 2017.
Frank van Zanten, Bunzl’s chief executive, said: “The acquisition of the Enor group is an exciting development for Bunzl as it represents our first acquisition in Norway and means that we now have operations in 31 countries globally.
“The business has a leading position in the catering equipment market and further extends our business in Scandinavia where we already have a strong presence in Denmark.”
The news came as Bunzl released its half-year results, having logged a 5% rise in half-year revenues to £4.3 billion.
Sales were helped by recent acquisitions but partly offset by the disposals of two businesses in the UK and France.
Pre-tax profits for the half year to June 30 rose 8% to £197.3 million, up from £181.9 million during the same period last year.
Mr van Zanten said new takeovers were now on the cards.
He said: “Looking forward to the rest of the year, the board is confident that the prospects for the group are positive and that the company will continue to develop the business and build shareholder value through a combination of organic growth and further acquisitions as the year progresses.”
Including the latest Norwegian takeover, Bunzl has clinched four acquisitions in the year to date.
The takeovers – which together cost the firm around £132 million – include workplace protection equipment supplier Revco, hygiene services business QS, and Monte Package Company.
It also disposed of two non-core businesses, selling off OPM in France – which was involved in selling SodaStream products to retailers in France – and its marketing services business in the UK.
Bunzl said the UK business was offloaded due to “limited opportunities to expand overseas”.
The two businesses were sold for £59 million.
Its UK and Ireland operations, which account for 14% of revenue, experienced strong organic revenue growth but Bunzl said operating margins were impacted “as the UK market continues to be challenging due to political and economic uncertainty”.
The company also cheered progress in its UK healthcare business thanks to UK Government efforts to simplify the procurement process within NHS England and reduce costs.
Revenue for the division rose 11% at constant exchange rates thanks to organic growth and acquisitions, though growth was held back by the disposal of the UK marketing services business.
Bunzl shares were up 1.2% in early trading.