By Li-mei Hoang
LONDON Feb 24 British business supplies
distributor Bunzl is looking for more companies to buy
after acquisitions helped its profit rise 17 percent last year,
The group, which distributes consumables such as carrier
bags, food packaging and hygiene products, spent 295 million
pounds ($492.3 million) on acquisitions in 2013, its highest
level since 2004.
Analysts estimate Bunzl may spend around 300 million pounds
per year on acquisitions for the next four years.
Shares in Bunzl were 5.4 percent higher by 1146 GMT on
Monday, the biggest gainers in the blue-chip FTSE 100 index
"There is plenty of firepower. We think there will be a good
flow of opportunities. We've averaged the last eight years at
150 million pounds, so I would be disappointed if we didn't
spend at least what our eight-year average has been," Chief
Executive Michael Roney said.
The company generated 302 million pounds of cash last year
up from 67.1 million the previous year, putting in a strong
position to fund future deals.
Net debt rose 15 percent to 849.5 million pounds.
Shore Capital analyst Robin Speakman pointed to the increase
in Bunzl's operating margin, which rose to 6.8 percent from 6.6
percent, and the stronger cash flow. "It's just a great story, a
solid company," he said.
Bunzl said it had agreed to buy a company in Germany and
another in the Czech Republic.
Roney said the acquisition of Bäumer and its related firm
Protemo represents the company's first steps into the cleaning
and hygiene and healthcare sectors in Germany and was a good
base to expand into that market.
Bunzl has also purchased Oskar Plast, which sells a variety
of disposable packaging products to customers throughout the
Czech Republic including retail chains, food processors and
Pre-tax profit rose to 372.2 million pounds in the year
ended Dec. 31, beating an average forecast of 344.4 million, a
Thomson Reuters poll of 18 analysts. Revenue rose 12 percent to
nearly 7 billion pounds.
The company raised its dividend by 15 percent to 22.4 pence