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Specialist distributor Bunzl increased its annual pre-tax profit by almost a quarter last year thanks to the upsurge of bulk orders of disposable gloves, masks and hand sanitiser during the pandemic.
Statutory profit before tax rose 23 per cent to £556m in the year ending December 31, with higher margins from healthcare, safety and cleaning products offsetting declines in profitability at the lower margin food service and retail businesses, which were forced to close or operate at reduced capacity.
The FTSE 100 company’s revenues also passed £10bn for the first time, up 8 per cent on the previous year.
The company warned, however, that 2021 sales and margins would be lower than last year, as it expected the virus-driven bump in sales to wane.
Chief executive Frank van Zanten said he expected “robust revenue growth†in 2021, but only “after excluding larger Covid-19 related orders which we do not expect to repeatâ€.
“Where there is still Covid around, there will of course still be smaller orders for masks, sanitiser and gloves,†he said. “But the larger orders from governments and big healthcare institutions . . . they are not expected to repeat.â€
The company said it did expect some of the changes from the pandemic to last. “We expect to see some benefit from enhanced hygiene trends across most of our business areas,†it said.
It is also forecasting a rise in orders at its food service and retail businesses in the second half of 2021, which are expected to benefit as economies reopen — this would offset the decline from shrinking Covid-19 related orders, van Zanten said.Â
Bunzl spent £445m on nine acquisitions last year to boost revenue growth and announced three more purchases on Monday morning.Â
It ended 2020 with a net debt to earnings before interest, tax, depreciation and amortisation ratio of 1.5 times compared with 1.9 times at the end of 2019. Shares in the outsourcer were up slightly in morning trading and have risen by about 17 per cent over the past 12 months.
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