Britain-based business supplies distributor Bunzl Plc
Bunzl, which supplies supermarkets, hospitals and hotels with products ranging from carrier bags to toilet rolls, reported a 2011 pretax profit of 306.1 million pounds on sales 6 percent higher at 5.11 billion.
The group, which operates in 23 countries and serves clients such as John Lewis and Selfridges, said revenue in continental Europe and in the company's largest market, North America, grew 7 and 12 percent, respectively, offsetting a 1 percent fall in Britain and Ireland.
We delivered organic growth of 4 percent last year, our highest rate since 2006, thanks to winning new business and seeing existing customers doing more business with us, Bunzl Chief Executive Michael Roney told Reuters on Monday.
An improving U.S. economy helped us grow there, but tough macro conditions have dragged (down) growth in the UK and Ireland. It's hard to predict numbers ... but I believe we (will) continue to grow at the rate we have in recent years in 2012, despite the persistently challenging macro environment.
Bunzl's performance is a good indicator of how the wider economy is faring because it is a replenishment business which receives weekly orders from companies such as Whitbread's
Britain's economy has barely grown since last September, with consumers reining in spending as they grapple with soaring prices, higher taxes and slow wage increases, while the government cuts spending in a bid to slash the country's large budget deficit.
The company, which has in recent years makes two-thirds of its growth through takeovers, said it spent 185 million pounds on acquisitions last year, bringing in an additional 200 million pounds of sales.
Bunzl's strategy of growing organically and through acquisition continues to bear fruit, said analyst Caroline de La Soujeole at brokerage Seymour Pierce, who rates the stock a buy. Bunzl has an attractive business model with good defensive qualities.
Shares in Bunzl, which have risen 7 percent in the last month and had outperformed the FT-All Share index <.FTAS> by 12 percent in the last six months, hit a record 958 pence and were up 2.2 percent at 951p by 0840 GMT, valuing the group at around 3.1 billion pounds.
Bunzl, whose margins improved to 6.6 percent, had been expected to report a 2011 pretax profit of 292 million pounds, according to a Thomson Reuters I/B/E/S poll of 17 analysts.
The company, which started life as a haberdashery in Bratislava in 1854, said it would raise its full-year dividend by 13 percent to 26.35 pence and said it had acquired U.S. retail gift packaging firm CDW Merchants for an undisclosed sum.
Roney said the company would likely keep up its rate of acquisitions and would look to get into new territories in Europe including Finland and Norway, as well as emerging markets such as Chile, Columbia and Turkey.
(Editing by Adveith Nair and David Holmes)