August 27, 2013 / 10:14 AM / in 4 years

UPDATE 1-Bunzl eyes more deals as first-half profit beats forecasts

* Spends 70 mln stg on acquisitions in Mexico, Britain

* Says pipeline for further deals remains good

* H1 pretax profit up by a better-than-expected 12 pct

By Paul Sandle

LONDON, Aug 27 (Reuters) - Britain’s Bunzl Plc has bought two more companies, continuing an acquisition drive that helped its pretax profit grow by a better-than-expected 12 percent in the first half of 2013.

The group, which distributes consumable products such as carrier bags, food packaging and hygiene products, said it had agreed to buy Mexican safety products supplier Espomega and Britain’s TFS, which provides point-of-sale materials.

The two take Bunzl’s spending on acquisitions to 203 million pounds ($316 million) so far this year, and it said it had a number of promising deal-making opportunities for the rest of the year. It spent a total of 272 million pounds in 2012.

Espomega’s products include gloves and protective clothing while TFS provides goods such as cardboard display stands.

The acquisitions announced on Tuesday cost a combined 70 million pounds, Chief Executive Michael Roney said.

“They bring (the number of deals) to six, on top of 13 acquisitions last year,” he said. “We feel pretty good about the acquisitions and the pipeline for acquisitions is good.”

Acquisitions added about 9 percent to the top line in the first half, he said, which combined with organic growth of about 2 percent and a similar contribution from currency movements to give a 13 percent rise in revenue to 2.96 billion pounds.

Pretax profit at Bunzl grew 12 percent to 167.6 million pounds, beating analysts expectations of 163.4 million pounds, according to a company-supplied consensus forecast from 13 brokerages.

Shares in the group, which have risen by a third since the start of the year, were trading up 1.5 percent at 1,374 pence by 0844 GMT.

Analysts at Panmure Gordon said it was a solid set of results, with top line growth driven by recent acquisitions and an interim dividend that reinforces confidence in the full year.

“(Bunzl) remains a model of consistency and delivery of steady progress, albeit that it remains dependent on economic growth and the addition of bolt-ons to fuel both the top and bottom line,” they said.

The company increased its half-year dividend by 14 percent to 10 pence a share.

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