ii view: distribution juggernaut Bunzl sticks with 2026 forecasts
After a tough 2025, this blue-chip is outperforming the FTSE 100 index so far in 2026. We assess prospects.
22nd April 2026 11:17
by Keith Bowman from interactive investor
First-quarter trading update to 31 March
- Adjusted revenue up 2% from a year ago
Guidance:
- Continues to expect moderate revenue growth in 2026
- Continues to expect operating profit margin to be slightly down this year
Chief executive Frank van Zanten said:
"The Group continued to deliver underlying revenue growth in the first quarter, supported by actions taken to improve performance and our strengthened focus on organic revenue opportunities.
“I remain fully confident in our ability to generate long-term compounding growth and value creation for all of our stakeholders."
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ii round-up:
Bunzl (LSE:BNZL) today announced sales that matched City expectations, with the global distributer of items such as paper towelling and cleaning products maintaining forecasts for 2026.
Adjusted revenues for the first quarter to late March rose 2%, better than gains seen in the prior two quarters, helped by growth at its core North America business which generated just over half of all sales in 2025.
Shares in the FTSE 100 company rose 2% in UK trading to a six-month high, having come into this news up by just over a tenth so far in 2026. The FTSE 100 index is up 5.5% year-to-date.
Operating across more than 30 countries, Bunzl supplies non-food consumable products to businesses and organisations such as Walmart Inc (NASDAQ:WMT), Domino's Pizza Group (LSE:DOM) and the NHS.
Product price increases to battle US tariffs helped drive revenue growth during this latest quarter, although sales were slowed by fewer trading days this time compared to the same quarter a year ago.
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Bunzl continues to expect moderate revenue growth in 2026 on an adjusted currency basis, pushed by some underlying revenue growth and a small benefit from previous bolt-on acquisitions.
The distributor also maintained estimates for a slight decline in the operating profit margin, with the City currently expecting a fall to around 7.5% from 7.6% last year.
Although the company announced no new bolt-on acquisitions, Bunzl flagged what it sees as significant consolidation opportunity, with a current active pipeline and improved acquisition outlook for 2026.
A first-half trading update is likely to be announced mid-to-late June.
ii view:
Tracing its history back to 1854, Bunzl today supplies more than 15,000 global businesses and organisations. The FTSE 100 company’s six core markets range from grocery, foodservice and safety, to retail, cleaning and hygiene, and health. Geographically, North America accounted for most sales during 2025 at 53%, followed by Europe at 21%, the UK and Ireland 16%, and the Rest of the World 10%.
For investors, despite little direct exposure to sales in the Middle East, soaring energy and fuel prices could impact group costs. A combination of trade tariff uncertainties and cuts to US government jobs could still dampen US consumer appetite to spend, which includes eating out at restaurants potentially supplied by Bunzl. Increased staff taxes for the UK business have increased costs, while a year-end debt leverage ratio of 2.0 times in late December was up from 1.6 times in late 2023. That increase underpinned management’s previous caution in temporarily halting the £200 million 2025 share buyback programme.
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More favourably, North American demand looks to remain steady. Management initiatives to improve performance are ongoing, with further bolt-on acquisitions anticipated. Bunzl’s position as a global leader in its market with no competitors of a similar size is not to be overlooked, while more than 18 years of consecutive dividend increases leave the shares on a prospective dividend yield of around 3.3%.
For now, and despite ongoing risks, this unrivalled distributor appears to still justify its place in many diversified investor portfolios.
Positives:
- Diversified customer type and geographical location
- Continues to seek growth enhancing acquisitions
Negatives:
- Uncertain economic outlook
- Subject to currency volatility
The average rating of stock market analysts:
Strong hold
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