Bunzl PLC’s (GB:BNZL) shares soared after the company announced a new share buyback plan and upgraded its full-year profit guidance following its half-yearly results for 2024. The company announced a share buyback plan worth £250 million, which will begin immediately and is expected to be completed before March 3, 2025. The board intends to announce an additional share buyback of approximately £200 million with its preliminary results for 2024. BNZL stock gained 9% as of writing, reaching an all-time high.
Bunzl is a distribution company offering products and solutions across multiple sectors, including healthcare, grocery, and hygiene.
Bunzl Delivers Mixed Performance in H1
In the first half of 2024, Bunzl’s revenue declined 0.4% at constant exchange rates to £5.7 billion. On a reported basis, revenue dropped 3.3% year-over-year. Nonetheless, the company witnessed improving trends in Q2 and in the first two months of the third quarter.
Meanwhile, adjusted operating profit rose 7.4% at constant exchange rates to £455.5 million, with margin increasing to 8.0% from 7.4% in the previous year. However, reported pre-tax profit decreased 11.9% to £279.4 million.
Despite mixed results, Bunzl hiked its interim dividend by 10.4% to 20.1p, compared to 18.2p in H1 2023.
Bunzl Upgrades Outlook
In terms of outlook, Bunzl raised its forecast for adjusted operating profit and now anticipates a “strong increase,” as compared to the earlier forecast of slightly above the 2023 profit. The improved guidance is driven by the company’s enhanced operating margin and recent acquisitions, including Nisbets.
Additionally, Bunzl expects solid revenue growth on an underlying basis, though a slight decline is anticipated on a reported basis.
Is Bunzl a Good Stock to Buy?
According to TipRanks’ consensus, BNZL stock has garnered a Hold rating based on three Buys, four Holds, and three Sell recommendations. The Bunzl share price target of 3,251.88p is 8.5% lower than the current trading level.
It is important to note that these ratings were assigned before the latest results and analysts could potentially change their price targets or recommendations.
