Broker snap: Upgrades imminent at Bunzl

28th Feb 2011 15:25

Results for 2010 from Bunzl were better than Panmure Gordon had been expecting and the broker thinks the plastic disposables specialist will enjoy another good year this time round.Profits before tax of £276.2m were comfortably ahead of Panmure Gordon's projection of £268.8m, largely because the broker had been more pessimistic "by some margin" about trading in the UK and Ireland.The broker is currently reviewing its profit forecasts in light of its misreading of the UK & Irish market, and expects to upgrade its estimates. "Given the greater non-food bias in this area [the UK & Ireland], this is a good result, and reinforces what Bunzl is all about: attention to detail," the broker said.Meanwhile, "North American operations continue to drive the group forward in profit terms."However, the economic outlook remains uncertain but with piles of cash in its war chest Bunzl can go out and buy growth through bolt-on acquisitions. The management's successful track record with past acquisitions suggests shareholders would welcome this use of cash.