Bunzl shares plunge on profit warning due to North America 'challenges'
Published: 08:16 16 Apr 2025 BST
Bunzl PLC (LSE:BNZL) saw its shares plunge 23% after the FTSE 100-listed distributor reported a "significant" fall in profit in the first quarter, cut its guidance for the year and terminated its share buyback programme.
This is on the back of what it says are "operational challenges faced by our largest business in North America and the implications on the remainder of the year from a more challenging start for the group".
Group revenue in the first quarter grew 0.8% on a reported basis, with a big hit from currency swings as growth would have been 2.6% at constant exchange rates. Underlying revenue fell 0.9%.
Acquisitions and disposals contributed net growth of 5.7%, while fewer trading days in the period impacted revenue by 2.2%.
Adjusted operating profit was "down significantly" year-on-year, which the company said reflected lower operating margins driven by the performance in North America and Continental Europe.
For the full year, guidance is being cut to "broadly flat" underlying revenue and "moderate revenue growth" at constant exchange rates, driven by announced acquisitions.
Profit margins are expected to drop to slightly below 8% from 8.3% last year, with around 7.0% margins expected in the first half before it takes action to improve things in the latter part of the year.
Bunzl admitted it was providing an update "despite significant uncertainties relating to tariffs and their impact on inflation and economic growth", with inflation typically a benefit to the company.
"Any potential benefit from tariffs together with a potential adverse impact on economic growth, is excluded from our guidance."
The £200 million share buyback programme has been "paused" for the remainder of 2025, having purchased around £115 million of shares year to date.
