British Distributor Bunzl Shares Slip After Slight Margin Decline Warning for 2026

05:11 AM EST, 12/17/2025 (MT Newswires) -- Bunzl (BNZL.L) shares were down nearly 4% in Wednesday morning trading in London after the company projected a "slight" margin decline in full-year 2026, overshadowing a reaffirmation of its 2025 profit outlook. In a pre-close trading update, the British distribution and outsourcing company said its 2026 group operating margin is expected to be "slightly down" on an annual basis, citing continued economic and geopolitical uncertainty. Meanwhile, Bunzl expects "moderate" revenue growth at constant currency in the coming year, backed by higher underlying revenue and contributions from announced acquisitions. For 2025, the London-listed company confirmed its full-year targets, anticipating revenue to increase within the 2% and 3% range at constant exchange rates, bolstered by acquisitions. At actual exchange rates, underlying revenue growth is projected to be "broadly flat." Adjusted operating profit is tracking in line with expectations, with the operating margin forecast at 7.6% for 2025, down from 8.3% a year earlier. Bunzl projects a slower rate of operating margin decline in the second half of 2025 compared with the first half, helped by operational improvements in North America and continental Europe, easier comparatives in Europe and synergy benefits from the Nisbets acquisition. Amid "tougher" comparatives, Bunzl anticipates positive momentum in the fourth quarter of 2025, underpinned by operational enhancements and new business wins in North America. "Despite what has remained a challenging market, we expect to meet our outlook for 2025, which was set out in April this year. We continue to remain strongly focused on performance across the Group and are encouraged by operational improvements being made and new business wins in North America. We have presented our view of 2026, which highlights our expectations for a return to organic growth and ongoing cost actions to support a more stable profit outlook," Chief Executive Officer Frank van Zanten said. RBC Capital Markets flagged the market's possible reaction to the update, noting a negative sentiment toward the 2026 margin guidance. "... Key focus today will be on the weaker FY26 margin outlook and decoding what BNZL means by 'slightly down' YoY, vs consensus assumption of very slightly up. This remains a key buy side concern that BNZL is now in a margin downcycle, having had a bonanza through lockdowns and is now facing a tougher consumer backdrop," the research firm wrote in a quick-take report.