Bunzl, world’s largest distributor of workplace products, reported that a decline in revenue due to a drop in prices, currency fluctuations and disposals, accounted for an 8.8 percent fall.
The shares of the £10 billion firm fell 133p, or more than four per cent.
Bunzl shares have now reached a level that is close to their August lows, which was the lowest since last time this year.
The company sells products for food processing, construction, and the construction industry, such as safety helmets, gloves, and toilet paper. The company also packages products for supermarkets, hotels and restaurants. It was a strong player in the pandemic, sourcing personal protection equipment (PPE) and cleaning agents to fight off Covid-19.
Over the last 20 years, it has acquired more than 200 smaller local businesses. Investors love it for its annual growth in dividends that hasn’t been broken since before the turn-of-the millennium.
In its third-quarter trading report, the company stated that the decline in revenue was due to “a continued decrease in Covid-19-related product sales, reduced inflation benefits, and wider normalisation trends related to post-pandemics, which led expected volume weakness.”
It insisted that this would not affect its earnings. It stated: “Operating Margin over the quarter was extremely strong. It remained substantially higher than when compared with the pre-pandemic in 2019 and slightly above the group’s expectation. In 2023, the operating margin is expected to reach a record high.
It said that “adjusted operational profit will be moderately higher in 2022 than at constant exchange rate”. The adjusted operating profit for 2022 was £885million, an increase of 11% year-on-year at constant exchange rates.
Frank van Zanten said, “Our performance has continued to demonstrate the strength and resilience in the business model of Bunzl.”