StockMarketWire.com - Distribution and outsourcing company Bunzl reported Monday profits rose modestly as margin declines in the UK and US weighed, while a stronger pound also kept a lid on growth.

For the 12 months to 31 December, profit before tax rose 4% to £424.8m. Revenue increased 6% to £9.08bn and 9% at constant currency, in line with guidance of 8% to 9% provided in December last year.

Adjusted operating profit rose 4% to £614m, while adjusted earnings per share rose 9% to 129.6p.

Group operating margin fell 10 basis points to 6.8%, largely driven by decreases in North America and UK & Ireland, partly offset by increases in Continental Europe and Rest of the World

In North America, the company's largest market, margin growth was weighed down from significant business previously won in grocery and operating cost pressures, the company said.

In its UK segment, Bunzl saw revenues increase 14% but operating margin was impacted by 'challenging market condition,' it said.

While Contentintal Europe saw substantial increases in revenue and profit with operating margin up amid 'significant growth in France due to integration of Hedis and strong performances in safety and foodservice, partly offset by weaker performance in cleaning & hygiene and disposal of OPM.'

The company proposed a final dividend of 35p taking the total dividend for the year to 50.2p, up 9% compared to 2017.

In a separate statement, Bunzl said it had acquired Liberty Glove & Safety, expanding its reach in the safety sector in the US.

Liberty Glove & Safety, based in California with revenue in 2018 of US$93m, operated from four locations sold a personal protection equipment, principally gloves, to distributors throughout the US. The majority of products supplied were own label brands.

'The purchase of Liberty Glove & Safety will further expand and develop our operations serving the safety sector in North America. The business has a number of strong own brands which will enhance our own label offering. We are delighted to welcome their employees to Bunzl,' said Frank van Zanten, Chief Executive of Bunzl.


At 4:05pm: [LON:BNZL] Bunzl PLC share price was -102p at 2437p



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