Bunzl Share Price Fell 6.64% Amid a Mixed Q3 Trading Update

The Bunzl plc (LON: BNZL) share price fell 6.64% after releasing its Q3 trading update for the period from 30 June 2023. Despite the strong performance Bunzl has consistently demonstrated in recent years and its continued resilience, the Group remains on a positive trajectory.

The adjusted operating profit for the quarter aligns with expectations, and the Group reaffirms its growth outlook for 2023. During the third quarter, Group revenue saw a 4.8% decline at constant exchange rates, with underlying revenue (adjusted for trading days) declining by 4.7%. 

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The dip can be attributed to a sustained decrease in COVID-19-related product sales, a reduction in inflation benefits, and broader post-pandemic normalisation trends. These trends contributed to an expected volume weakness consistent with the previous quarter.

Additionally, there was one less trading day than the corresponding period, which had a negative impact of 0.8% on revenue. On the positive side, acquisitions contributed 2.0% to revenue growth at constant exchange rates, although the disposal of the UK healthcare business had a negative impact of 1.3%.

The Group reiterates its confidence in achieving a moderately higher adjusted operating profit in 2023 compared to 2022 at constant exchange rates. It expects the Group’s constant exchange rate revenue to be slightly lower than in 2022.

Acquisitions will partly offset this reduction, but it is also due to some organic decline after solid organic growth in recent years, along with a minor impact from the disposal of the UK healthcare business.

In September 2023, Bunzl agreed to acquire CT Group, a company that distributes surgical and medical devices and provides value-added logistics services to healthcare providers in Brazil. 

Frank van Zanten, Bunzl’s Chief Executive Officer, said: “Our performance continues to highlight the strength and resilience of the Group’s business model, with revenue over the quarter 29% higher, and operating margin substantially higher, than the comparable period in 2019 at constant exchange rates. I remain confident in our ability to sustain a higher operating margin compared to pre-pandemic levels, supported by the acquisitions we have made over the period. Furthermore, today, we announce our 13^th and 14^th acquisitions of 2023, with a total year-to-date committed spend of more than £425 million.”

Bunzl share price. 

The Bunzl share price fell 6.64% to trade at 2728.0p, from Monday’s closing price of 2922.0p.