3 Min Read
(Adds CEO, analyst comments, share movement)
By Esha Vaish
Feb 27 (Reuters) - Distribution group Bunzl Plc expects its U.S. business to see an uplift from President Donald Trump's plan to encourage businesses to manufacture more locally, the British firm's head told Reuters.
Chief Executive Frank van Zanten said the company would see higher organic sales of its safety gear for builders and other firms if Trump made good on his plans to back infrastructure projects and encourage firms to move manufacturing back to the United States.
"If Trump is bringing industry back to the U.S., we will end up selling more gloves and boots and safety products," he said, adding that the United States accounts for about 60 percent of Bunzl's revenue.
The company, which also supplies packaging materials for supermarkets, said it was "well positioned" for 2017, after reporting a better-than-expected 2016 profit that made the company's stock the top FTSE bluechip gainer on Monday.
Bunzl's adjusted pretax profit rose 16 percent to 478.2 million pounds ($594 million) in the year ended Dec. 31, ahead of the 470.6 million pounds estimated in a company-compiled consensus.
Revenue grew 14 percent to 7.43 billion pounds, as recent acquisitions offset some weakness in organic growth over the year. Organic revenue was up 0.3 percent in 2016.
The company has spent billions buying small firms since 2004, even as 2016 organic growth was tempered by price deflation in some of Bunzl's plastic products and some negative impact on its safety equipment business from a slump in the oil and gas activity.
CEO Zanten, who sees acquisitions in the United States and the UK continuing, said the company had seen a pickup in organic growth in the fourth quarter, winning some new business in both the regions.
"We're more confident about organic growth right now," Zanten said, adding that the UK business was performing well, having recovered from some pressure seen in the aftermath of Britain's vote to leave the European Union.
Morningstar analyst Michael Field forecast organic growth rate of about 2.5 percent for 2017, saying Bunzl should see some benefits as "short-term headwinds abate".
The company's shares were up 2.5 percent at 2,2,26 pence at 1136 GMT. ($1 = 0.81 pounds) (Reporting by Esha Vaish in Bengaluru; Editing by Amrutha Gayathri and Maju Samuel)