Shorecap sees Bunzl 2014 earnings upgrade of up to five per cent

24th Feb 2014 09:39

Shorecap said it plans to upgrade its 2014 forecasts by up to five per cent for Bunzl after the company's 2013 profits came in above expectations.The broker maintained its 'buy' stance on the stock with a target price of 1483p. "A strong performance was delivered in all metrics. Revenues at £6.1bn were £68m ahead of our forecast with the benefit of a c2% currency tail wind last year. EBITA at £414m was 4% ahead of our expectation of £397m, this appears due to a margin improvement of around 20 basis points over our forecast of 6.6%," Shorecap said."The profit performance is maintained at the pre-tax level with this 6% ahead of our expectation at £372m. EPS at 82.4p compares to our 77.5p expectation, also 6% ahead. The dividend for the full year rises by 15% to 32.4p, (against) our forecast 31p."The broker noted that exchange rates were now a "head wind given recent sterling strength" but the strong margin performance was a key driver for an earnings upgrade.Bunzl shares were up 52p at 1535 at 09:50.FP