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Lockhart parent balances the books despite foodservice decline

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Bunzl successfully completed planned warehouse consolidations within the 2020 financial year.

Bunzl, the parent company of Lockhart Catering Equipment, Aggora and Continental Chef Supplies, has reported a steady overall revenue growth despite losses in its foodservice division caused by the coronavirus impact.

In the 12 months to 31 December 2020, the group garnered a £10.1bn turnover, 8.4% up on the £9.3bn earned in 2019.

Operating profit grew at an even steeper rate of 19.1%, from £653.3m to £778.4m.

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While the global group doesn’t break down its revenue by market sector, it does detail individual countries’ earnings. The UK and Ireland generated 13% of turnover and 9% of adjusted operating profit.

Organic revenue growth of 2.6% in this region was driven by growth in Covid-19 related products which offset significant decline in other product sales, with strong performances in the safety, cleaning and hygiene and healthcare sectors.

Operating margin in UK and Ireland declined from 7.0% to 5.3%, reflecting the impact of Covid-19 related shutdowns in foodservice and non-food retail and additional provisions for increased customer credit exposure, while Ireland’s performance was significantly impacted by exposure to foodservice

Nevertheless, Bunzl successfully completed planned warehouse consolidations, including non-food retail and catering warehouses.

Frank van Zanten, CEO of Bunzl, said: “The pandemic has served to highlight the vital role that Bunzl plays in ensuring supplies of essential products as well as the benefits of our diversification. As a result of our extensive supply chains and our Asia sourcing and auditing operation, we were able to quickly source and deliver significant quantities of quality assured Covid-19 related products, such as gloves and masks. Consequently, we were able to offset the negative impact that restrictions had on many of our customers’ businesses, particularly in the foodservice and retail sectors. I am very proud of the role we have played in serving and protecting front line heroes.”

Looking ahead, he commented: “Overall in 2021 we expect robust revenue growth over the prior year at constant exchange rates, after excluding larger Covid-19 related orders which we do not expect to repeat. We anticipate that the recovery in sales of other products, as restrictions ease, will broadly offset the decline of smaller Covid-19 related orders, with recent acquisitions making an increasing contribution to the group’s performance. We also expect future growth to be supported by enhanced hygiene trends and our differentiated offering of sustainable and responsible solutions.”

Tags : bunzlbunzl lockhartbusinessfinancial resultsfinancials
Clare Nicholls

The author Clare Nicholls

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