UK and Ireland revenues at distribution group Bunzl were flat last year but the company did manage to increase operating profit by 8%, it annual results have revealed.
Accounts published today show that the company recorded sales of £992m during 2012 — no improvement on the previous year — but operating profit rose to £65m.
“In a market where demand is still suppressed and there is constant pressure from customers to make savings, we have achieved underlying growth and margin improvement by further developing our market position and by successfully integrating the recent acquisitions,” said chief executive Michael Roney.
The firm added that the London 2012 Olympics was an “important event” due to the volume of products it provided, while it also hailed the “continued development” of its own brands.
Bunzl said that in the hospitality business it saw good growth, particularly with high street coffee shops and contract caterers.
“Our ability to offer an extensive range of own brand products, which complement branded products, helped to make savings for our customers and maintain our operating margins,” said Roney. “This remains a very competitive market, so we are conscious of the need to provide high levels of service at low levels of operating cost. As part of our programme to deliver these, we have further rationalised our network and closed two locations.”
Under the ‘Rest of the World’ section of its annual report, Bunzl said its catering equipment businesses had suffered a “disappointing” year as the company continued to be challenged by further softening in the traditional hospitality markets.
“To offset this, the business has been refocusing its efforts to grow market share in the more resilient healthcare and resources sectors,” said Roney.
On a global level, Bunzl’s revenues grew 5% year-on-year to £5.4 billion, while pre-tax profits increased 6% to £324m.
“I am pleased to report another good set of results for Bunzl due to a combination of organic revenue growth, good performance from the acquisitions made in 2011 and significant acquisition spend in 2012,” concluded Roney.
“While the macroeconomic outlook remains challenging, particularly in Europe, we believe that our strong market position, growing and resilient customer base and the promising pipeline of opportunities for additional market consolidation will provide the Group with a good platform for further growth.”