Bunzl Share Price Plummets as Trump Tariffs Hit North American Profits

Shares in FTSE 100 distributor Bunzl plunged dramatically today, wiping more than £2.5 billion off its market value after the company issued a surprise profit warning linked to tariff pressures in its North American operations.

The company, known for distributing workplace essentials such as toilet paper, cleaning materials and disposable catering supplies, saw its shares tumble 25.6 per cent to £22.90, marking their lowest level since March 2021. This significant decline came just six weeks after annual results gave no indication of impending difficulties.

Bunzl’s management revealed that whilst group revenues continued to grow during the first quarter, profit margins suffered considerably. The company has now paused its £200 million share buyback programme and predicts operating margins will fall below 8 per cent for 2025, compared to 8.3 per cent in 2024.

The North American division, which represents approximately 60 per cent of Bunzl’s business, faces particular challenges. The company cited revenue softness across its operations and has implemented leadership changes to address operational issues. Chief Executive Frank van Zanten expressed disappointment with the first-quarter performance, acknowledging the challenging trading environment.

Market analysts at Peel Hunt have placed their estimates under review, suggesting approximately a 10 per cent reduction to the 2025 profit before tax consensus. The company’s traditionally stable reputation, built on 32 years of consecutive dividend growth, now faces its most significant test in recent memory.

The suspension of the share buyback programme and the company’s move to maintain leverage at the lower end of its target range signals a notably cautious approach to financial management. Whilst Bunzl maintains its ability to pass through price increases to customers, the spectre of Trump’s tariffs and potential recession impacts loom large over its immediate future.