Morningstar | Narrow-Moat Bunzl Supplies a Solid First Half
With Bunzl having released a preclose statement on June 27, there was little in the way of surprises in the firm's first-half release on  Aug. 28 , aside from some further detail on the company’s performance. Overall, the results were very much in line with our full-year expectations, so we do not expect to make any changes to our forecasts or to our GBX 2,160 fair value estimate. We reiterate our narrow moat rating for the company.Impressive organic revenue growth of just over 5% was driven by a solid performance across all regions. Flat operating margins year over year constituted a decent result, given operating cost pressures as a result of inflation in the U.S. and the mix effect of some lower-margin business taken on (also in North America) in 2017. The company is continuing with its successful roll-up strategy. Bunzl can acquire small firms with existing client relationships, supply them with more sophisticated back-office management systems, and allow them to benefit from Bunzl’s economies of scale and range of supplies, all while maintaining the original client-facing team. So far in 2018, the company has made several strategic acquisitions in complementary product lines and indeed into new geographies. Just today (Aug. 28), Bunzl announced the NOK 294 million acquisition of Enor, giving the firm a foothold in Norway, where it had not previously been operating.
We believe that Bunzl, as the only global provider of nonfood consumables, is well positioned to benefit from several structural growth drivers, in particular the trend to outsourcing by small and large companies alike.
Bunzl is engaged in the distribution and outsourcing service, supplying a range of internationally sourced non-food products to a variety of market sectors. Co.'s market sectors: Foodservice, which comprised of non-food consumables, including food packaging, disposable tableware and guest amenities, cleaning products and safety items; Grocery, which goods not for resale including food packaging and hygiene supplies, to grocery stores; Cleaning and hygiene, which including chemicals and hygiene paper; safety, which include a range of personal protection equipment, including hard hats, gloves, boots, ear and eye protection and other workwear, to industrial and construction markets.
Morningstar, Inc. is a leading provider of independent investment research in North America, Europe, Australia, and Asia. The company offer an extensive line of products and services for individual investors, financial advisors, asset managers, and retirement plan providers and sponsors.
Morningstar provides data on approximately 530,000 investment offerings, including stocks, mutual funds, and similar vehicles, along with real-time global market data on more than 18 million equities, indexes, futures, options, commodities, and precious metals, in addition to foreign exchange and Treasury markets. Morningstar also offers investment management services through its investment advisory subsidiaries and had approximately $185 billion in assets under advisement and management as of June 30, 2016.
We have operations in 27 countries.
Unfortunately, this report is not available for the investor type or country you selected.
Browse all ResearchPool reportsReport is subscription only.
Thank you, your report is ready.
Thank you, your report is ready.