A turnaround in North America has pushed the distribution giant to lift full-year guidance and reward shareholders with a fresh £500m buyback.
Bunzl (LSE: BNZL) shares climbed 2% after the distribution group posted stronger-than-expected first-half results and unveiled a £500m share buyback, capping a gradual recovery in its stock through 2026 following a difficult 2025.
The rise came as investors welcomed a marked improvement at North America Distribution, Bunzl's largest division, which had dragged on group performance last year but returned to growth in the period, posting an 8% rise in underlying revenue on the back of new customer wins and higher volumes.
Group revenue rose 3% to £5.93bn in the six months to 30 June, with underlying growth of 3.2% marking a fifth straight quarter of expansion, helped by both higher volumes and a return of cost inflation. Adjusted operating profit increased 8% at constant currency to £440.6m, with the operating margin widening to 7.3% from 7.0%, while adjusted earnings per share climbed 11.4% to 87.7p and the interim dividend was raised 3% to 20.8p.
Management pointed to restored service levels and a re-energised salesforce in North America as the key drivers of the turnaround, though it cautioned that much of the margin uplift from inflation in the first half was likely to be temporary rather than structural.
On the back of the stronger performance, Bunzl upgraded its 2026 outlook to reflect a broadly flat operating margin and modest adjusted profit growth, and said low leverage underpinned both the new £500m buyback and continued appetite for bolt-on acquisitions, having completed two deals so far this year with more expected in the second half.
This report is based on Bunzl’s announcement and coverage by UK Investor Magazine. Company announcements can be tracked via London Stock Exchange RNS and Investegate, and the full markets calendar is worth watching for the next update.
This article is for general information only and does not constitute investment advice or a recommendation to buy or sell any security. Photo: CHUTTERSNAP on Unsplash.
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