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‘Mixed’ Market Conditions Blamed for Slower First-Quarter Underlying Sales Growth at Bunzl

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Shares of Bunzl (BNZL.L), a specialist distribution and services firm, slumped early on Wednesday after the company said that underlying revenue growth “slowed” in the first quarter due to “mixed” macroeconomic and market conditions.

Sales in the first quarter rose by 4% at actual exchange rates, the London-based firm said in a trading update. After adjusting for the number of trading days relative to the prior year, the increase in sales stood at about 2.5%. Of this, acquisitions, net of disposals completed in 2018, contributed 1% and underlying revenue growth added roughly 1.5%.

Among the countries in which the group operates, Bunzl blamed North America in particular, saying the continent experienced slower underlying growth of about 1% as a lack of volume growth and product-price inflation resulted in “slightly” lower sales in the grocery and retail sectors.

Bunzl noted the recent acquisition of Coolpack, a distributor based in the Netherlands and a supplier of specialist packaging to supermarkets and the pharmaceutical, food processor and foodservice sectors, with sales of 4 million euros ($4.5 million) in 2018.

“Growth through acquisitions to consolidate the markets in which the company operates is an important part of Bunzl’s consistent and proven strategy,” the company said in the statement. “The pipeline of potential acquisitions is promising and, with ongoing discussions taking place, the company expects to complete further transactions as the year progresses.”

Bunzl, which last year maintained its 26-year record of growing dividends, reported 183 million pounds ($239.2 million) of committed spend on acquisitions, adding 148 million pounds to its annualized revenue print. This follows a record 616 million-pound outlay for takeovers in the previous year, according to the company’s 2018 results.

Nevertheless, London-listed shares of the company were 9.1% lower at the time of writing.

Price: 2,329.48 Price Change: -221.52 Percent Change: -8.68

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