LONDON (dpa-AFX) - Bunzl Plc (BZLFY.PK, BNZL.L), a specialist distribution and services Group, reported Wednesday significantly lower adjusted operating profit in its first quarter, despite slightly higher revenues. The first-quarter profit was below expectations, and the company reduced its fiscal 2025 guidance.
In its update on trading for the period since December 31, the company reported that Group revenue in the first quarter increased 0.8 percent on a reported basis and 2.6 percent at constant exchange rates. Meanwhile, underlying revenue declined 0.9 percent.
Adjusted operating profit was down significantly year-on-year in the first quarter, reflective of an operating margin decline driven by performance in North America and Continental Europe.
Looking ahead for fiscal 2025, Bunzl now expects moderate revenue growth at constant exchange rates, driven by announced acquisitions and broadly flat underlying revenue.
Bunzl previously expected robust revenue growth at constant exchange rates, boosted by announced acquisitions and slight underlying revenue growth.
Further, group operating margin for the year is now expected to be moderately below 8.0 percent, compared to 8.3 percent in 2024. The company was expecting group operating margin to be in-line with last year and to be higher than pre-pandemic levels.
Operating margin in the first half of the year is expected to be around 7.0 percent, with the Group's second half operating margin seasonally higher and expected to benefit from actions taken.
The company said the revision in outlook reflects the operational challenges faced by its largest business in North America, and the implications on the remainder of the year from a more challenging start for the Group.
Frank van Zanten, Chief Executive Officer of Bunzl, said, 'I am disappointed with our performance in the first quarter in this challenging trading environment. We are taking decisive action to improve performance in the Group, particularly with regards to execution in our largest business in North America.'
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