Business Overview
Bunzl Plc (LON: BNZL) is a specialist international distribution company, which is engaged in supporting businesses by distributing non-food consumable products to a range of markets in various countries and seeks help to increase the efficiency and improve the competitiveness of its customers by offering customised solutions to B2B customers. The operations of the group are differentiated in four geographical segments, namely North America, Rest of the World, Continental Europe, and the U.K. & Ireland.

Recent News
On 23^rd December 2019, the company announced that Frank van Zanten had been nominated to be appointed as a non-executive director of the Supervisory Board of Koninklijke Ahold Delhaize N.V. He would start his tenure from 8 April 2020.

Trading Statement
The company announced the pre-close update for the year ending 31st December 2019. For the financial year 2019, the group revenue is expected to have surged in the range of 2%-3% at actual exchange rates. While on a constant exchange rates basis, the revenue is anticipated to increase by approximately 1%, driven by the net of disposals, impact of acquisitions, with underlying revenue widely unchanged against the previous year. The company has newly acquired an emergency and safety response supplies company.  FRSA (Fire Rescue Safety Australia) is mainly involved in the distribution of personal protection equipment, and specialist safety focused on rescue, fire, and emergency response services.  This business is a Perth-based, which operates from five different locations across Australia. Its annual revenue is around £19 million. In the upcoming year, the company has plans to acquire three businesses, including this acquisition, for a total capex of around £120 million.

Share Price Performance  

Daily Chart as on 24^thDecember 2019, before the market closed (Source: Thomson Reuters)

On December 24^th, 2019, Bunzl Plc shares were trading at GBX 2,143 at the time of writing before the market close (at 10:45 AM GMT), up by 1.32 per cent against the last day closing price. Stock's 52 weeks High and Low are GBX 2,554.60/GBX 1,891.50. The stock price has delivered 9.57 per cent negative return in the last one year. However, the stock price is recovering, giving 5.88 per cent returns in the last one month.

Conclusion
The company’s underlying revenue growth is slowing due to the impact of the mixed macroeconomic and market conditions across the countries and sectors in which the group operates. The company's expectations for the FY2019 remain unchanged. It faces various uncertainties and principal risks which could impact the overall business of the company. The company operates in a competitive environment. Competition pressure could affect the revenue and profitability of the company. An unsuccessful acquisition could impact the profitability of the company. Fluctuations in the exchange rates could affect the profitability of the company. However, the company expected an increase in revenue for the year by 2-3 per cent. The company is making acquisitions which is an essential step for the growth of the business. It had recently acquired a safety and emergency response supplies business in Australia, which is expected to increase the revenue of the company. The company looks promising for the long term.

The company’s total revenue has grown from GBP 6,489.7 million in FY2015 to GBP 9,079.40 million in FY2018, giving approximately 11.84 per cent growth on a CAGR basis.

Based on the above rationale, we have given a "HOLD" recommendation at the current price of GBX 2,109 (as on 24th December 2019, before the market close at 8:00 AM GMT).

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