Bunzl: Inflation spike lifts FTSE 100 outsourcing firm’s revenue
Distributor Bunzl saw a boost in its bottom line after the firm was able to pass on inflationary pressures to customers. The FTSE 100 outsourcing group recorded a three per cent rise in revenue to £5.93bn in the first half of the year, bolstered by commodity-driven price adjustments and growth across North American markets. Bunzl’s [...]
Outsourcing firm Bunzl reported a three percent increase in revenue to £5.93 billion in the first half of the year, driven by inflationary pressures being passed onto customers and growth in North American markets. The company's gross margin expanded to 29.4 percent, up from 28.8 percent, as it effectively managed the inflationary environment.
Gross margin refers to the portion of revenue retained after deducting direct costs of goods sold. Operating profit rose by eight percent to £440.6 million, with the operating margin swelled 30 basis points to 7.3 percent. Chris Beauchamp, chief market analyst at IG, noted that Bunzl's shares had significantly fallen in 2025, hitting a 15-year low, but the company has shown strong recovery and steady growth in the current year.
The business upgraded its full-year margin expectations to be flat year-on-year and initiated a £500 million share buyback and hiked its interim dividend by three percent. However, the group cautioned that this performance was primarily due to the temporary impact of inflation. The British Retail Consortium expressed concerns over rising shop prices due to increasing energy and commodity costs, with UK headline inflation reaching 2.9 percent in the 12 months to July, up from 2.6 percent.
Bunzl's performance was bolstered by a turnaround in North America, where revenue grew by 4.6 percent, largely due to strong growth in grocery and foodservice. The company's market accounts for 52 percent of its revenue.
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