Bunzl plc Reports Revenue Growth and Acme Supplies Acquisition

Shares in international distribution and outsourcing group Bunzl (LSE: BNZL) fell as much as 2.3% in early trading today after announcing the acquisition of Acme Supplies.

Acme, the cleaning and supplies business, has been ran by the Impett family since 1980. It reported $16m of revenues in 2014, and provides services to all regions of Vancouver Island.

Management expect Bunzl to grow group revenue by 6% at constant exchange rates this year after good performances from acquired businesses and 2.5% underlying revenue growth.

Acquisitions remain a “key component of the Group’s growth strategy,” and management said the strong financial position of the company should enable it to complete more purchases in an environment that “remains positive with a promising pipeline of opportunities.”

Since 2004, Bunzl has announced more than 80 acquisitions. This has added average annualised revenues of £265m and cost the company £180m a year.    

Operating margins are also expected to rise this year, although management did not cite why or by how much. Margins had risen by 30bps over the first half of the year, driven by a reduction in operating costs and growth from acquired high-margin businesses, so it seems likely this latest increase has been driven by the similar conditions.

Whether these solid results and confirmation of its acquisition-based strategy makes Bunzl a buy is up to you, but I’m confident you could benefit from reading our latest free report, 7 Simple Steps For Seeking Serious Wealth.

It reveals The Motley Fool’s 7-step plan designed to help you become one of the UK’s secret millionaires.

Click here for your report while it is still available – it is completely free and comes with no obligation.

Zach Coffell has no position in any shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors.