Bunzl, Halma Fall On Latest Updates

These FTSE 100 stocks have both dropped following fresh market statements released in Thursday trading. Here are the key takeaways from their updates.

Bunzl

Bunzl’s share price has fallen 2% to £30.44 after the firm released mixed trading details for the six months to June.

The support services business said that it expects revenues to rise 4% to 5% during the six months to June. At constant currencies it forecasts a sales increase of 1%.

Revenues are slowing sharply from last year’s levels, today’s update shows. In 2022 sales rose 17.1% year on year, or 9.8% at stable exchange rates.

Bunzl commented that “growth at constant exchange rates is expected to be driven by acquisitions, although partially offset by the impact of the UK healthcare disposal, and with underlying revenue growth expected to be broadly flat.”

Weak volumes in the foodservice sector means half-year underlying sales in its core North American marketplace are expected to fall “moderately,” Bunzl said. However, it added that some of the difficulties in foodservice are expected to be temporary.

Elsewhere, the FTSE firm said it expects to report “good underlying revenue growth in Continental Europe and strong growth in UK & Ireland” on the back of inflationary tailwinds. A decline in Covid-19-related sales is tipped to damage sales across the rest of the world, though.

Despite lower sales between January and June, Bunzl said it expects sales for the full year to be “slightly higher” than they were in 2022, driven by organic growth and the impact from acquisitions.

The company also raised its full-year operating margin guidance and predicted a “slightly lower” margin compared to last year’s levels.

Chief executive Frank van Zanten commented that “Bunzl continues to demonstrate resilience, with our operating margin over the first six months of the year expected to remain well ahead of historical levels and driving an upgrade to our full year expectations.”

He added that “our acquisition momentum remains strong,” with the company also announcing the acquisition of personal protective equipment (PPE) distributor EHM for £18 million today.

Halma

Safety equipment supplier Halma is leading the FTSE 100 lower today after releasing full-year trading numbers. At £23.17 per share it was last 4.6% lower on the day.

The company announced revenues of £1.85 billion for the 12 months to March. This was up 21% year on year and represented an all-time high. On an organic basis turnover was up 10% over the period.

Meanwhile, adjusted pre-tax profit soared 14% year on year to £361.3 million. This represented a 20th consecutive year of record profits and prompted Halma to raise the full-year dividend 7% to 20.20p per share.

Annual dividends here have now risen by 5% or more for 44 years in a row.

Chief executive Mark Ronchetti commented that “2023 was a successful year for Halma, reflecting the contributions and continued commitment to our purpose of everyone at Halma.”

He added that “we substantially increased strategic investment to record levels, increasing our opportunities for future growth through organic investment and strategic acquisitions, while maintaining a strong balance sheet.”

Halma’s net debt jumped to £596.7 million last year from £274.8 million in financial 2022 as the firm invested heavily in acquisitions. Consequently its net debt to EBITDA ratio rose to 1.38 times from 0.74 times a year earlier.

The firm made seven bolt-on buys last year at a total cost of up to £397 million. It has since made two further acquisitions in the current 12-month period.

Ronchetti said the firm had made “a positive start” to the new financial year and predicted “good organic constant currency revenue growth” and return on sales of around 20%. This is up from 19.5% last year.

Royston Wild owns shares in Bunzl.