Resilient Bunzl Rumbles On

Narrow-moat Bunzl’s first-half results were strong, with organic revenue growth of more than 9%, as the wave of recovery takes hold in core areas of the business, offsetting the decline from elevated sales of coronavirus-related products during the pandemic. This decline in COVID-19-related products has also hit operating margins, with these products generally garnering higher margins, but over the full year we expect this to come out in the wash. With few surprises since the end-June update, we do not expect to make any material changes to our forecasts, nor to our GBX 2,600 fair value estimate. Currently, we view the shares as slightly overvalued.