Bunzl Share Discussion Threads

[miata] 20/4/2009 12:38

Underlying revenue was marginally down due to the impact of deteriorating macroeconomic conditions across the international markets in which the Company operates. This more challenging environment has also put some pressure on margins, particularly in the UK & Ireland and parts of the Rest of the World.

[mutleymagic] 20/4/2009 12:14

Peter - what source?? - seeing as has been tipped as a BUY several times - and the results have been pretty decent overall - what reason for this alleged drop - MM

[peter anthony] 20/4/2009 12:07

Was it tipped to drop further in the Times?

My sources indicate a drop to about 407p

[miata] 20/4/2009 10:34

Bounce point sucessfully tested twice.

[miata] 20/4/2009 07:04

BNZL down to 475p (bounce point).

[mutleymagic] 20/4/2009 06:57

Been tipped in a few places now - MM

[extrader] 19/4/2009 20:59

Tipped in The Times.

[miata] 17/4/2009 18:36

Close down at 481.75p after a low of 473p.

[miata] 17/4/2009 09:31

Distribution group Bunzl inevitably tumbled back down thru 500p as assured.

Back down to pivot, small short bounce expected until C & GE move market in an hour.

[mutleymagic] 17/4/2009 09:15

In auction or suspended at moment price 5.15 BID - 4.66 offer - waiting !!

[primrose] 17/4/2009 08:01

"Distribution group Bunzl inevitably bounced back up thru 500p as assured.."


Smaller trade gains than viable in RBS but a gain over those mms nonetheless :)

Have made £1500 this week, and will be doing the same for the next 2-3 weeks,
during this temporary markets relief/dcb rally. Will remain off bbs though
keeping those perverse mm bar stewards more in the dark, where they belong.

Have a good weekend all. ~ Phil ;)

[miata] 16/4/2009 16:05

Distribution group Bunzl continued this morning's tumble, down 10% to 484.25p.

Fundamental Information
Market Cap(m) 1,751.57 Div Yield(%) 3.49
PE Ratio 13.26 Div Cover 2.37
Operating Margin(%) 3.40 Quick Ratio 0.82
Profit Margin(%) 3.40 EPS (p) 44.50
Turnover per share(p) 13.08 Beta (f) 0.69
PEG Factor 3.50 ROCE 12.16

[paddywak1967] 16/4/2009 14:33

This is as low as this will go. Shorters will have to close their positions soon....most likely before the day is out!

[mutleymagic] 16/4/2009 13:10

higher lows each time - heading slowly but surely back up - IMO

[royaloak] 16/4/2009 13:00

Primrose, I shorted it twice today, closed both positions now. When debt is taken into account reckon pe is around 18, so I will be looking to short again in the future, but expect it to bounce a bit first.

Oilman and I have been discussing the chart on this on the TIAE, plus other things.

[primrose] 16/4/2009 12:04

This hasn't fallen further and wont in the coming days. Shorters have
simply moved in today and are manipulating the order book trying to
hold the shareprice down still.

You MMs miata will cover and close shorts sooner. There's nothing being
gained off retail investors of any significance. No rush or concern on
this one. 510p to 550p bounce back will happen today/tomorrow or Monday
without any doubt. Seen it too many times before, and the quoted TW.
went from 19p to 54p within 5 weeks recently. These being the lows for
BNZL. The $US will also slip back to 143p near term which wholly benefits
BNZL..

[miata] 16/4/2009 11:17

CAZENOVE
In addition we estimate $ strength is causing some small transaction margin impacts on imported products. This last factor particularly applies in UK and Australia, which buy imported products priced in US$; we estimate the level of imported goods sales at c.27% in UK and 30% in Australia (and c.8% in North America, giving c.15% for BNZL overall).

BNZL has raised further $300m debt from US private placement (total now $800m) with 5-10 year maturities. This increases debt maturity, but we estimate at is c.1% higher interest charge than existing debt; we increase group interest charge by -£2m.
In our view the acquisition pipeline condition is unchanged; a good pipeline, currently fairly inactive due to valuation perception gaps and macro uncertainties, but with potential for distressed sales opportunities to quickly emerge.

NUMIS
Bunzl's IMS was a fraction more downbeat than we expected with organic growth
slightly negative versus our expectation of 1.5% growth. Clearly Q1 has been tough, particularly in the UK which is less defensive as it has a higher percentage of sales outside the food industries. There will be some disappoinment in the short term but we believe the fundamental attractions of the business have not changed.

Q1 IMS was a little more cautious than we expected. Group sales rose by 18% in Q1 but we believe currency accounts for 16% and acquistions a short 2% of this figure.

Underlying sales were marginally down against our expectation of +1.5%. Part of this can be explained by the UK business where the economic background has deteriorated through the quarter. Also the UK business is less exposed to the resilient food and food related sectors.

The statement alluded to margin pressure, particularly in the UK but also to parts of ROW which we believe relates to Australia. Both areas have weak currencies which will have exaggerated the issue.

We have reduced our forecasts for the current year (PBT from £266m to £260m) to
take account of the more cautious statement. However, we are reluctant to take a knife to our forecasts as we believe that Q1 is probably the worst comparator as organic rates of growth had slowed in H2 of 2008. Also acquistions account for 2/3rds of growth over the past 18 years and we see eps and value accretion from these in the current economic environment.

We expect a short term negative re-action but would encourgage long term investors to buy into this weakness.

[miata] 16/4/2009 11:11

True.

Years ago, Bunzl used to make a large number of small acquisitions and integrate them well - this was the key to its status then as a growth stock.

There obviously may be possibilities for future acquisitions at fire-sale prices if the recession continues for longer than expected - that is the upside. The downside is both volume and margins will be hit and Bunzl has never been particularly good at cutting costs.

[extrader] 16/4/2009 11:05

Hi miata,

There've been a grand total of 11 posts on this share/thread so far this year - fewer than TW. gets in an hour ! I don't think this is on many 'punters' radar screens....

[miata] 16/4/2009 10:59

My view is the shareprice is more likely to continue its decline over the next few days as punters become aware of the outlook.

[primrose] 16/4/2009 10:51

Yeh I only picked up on this from the overdone fall today. The currency
conversion factors are also interesting to me, although with them being
in 23 countries, the math must be impossible. This is clearly being
shorted and held down today by traders/MManipulation for whatever
financial gain reasons..

Obviously they're 50p per share ahead of any who bought yesterday or
before but if I was in that boat, there'd be no reason to worry and
sell but just hold. Therefore I dont see what mms are going to gain
here as a fair amount of uk retail have been buying steadily c485p
all morning. Maybe the US market PM is more important to the city.

460p to 750p across the last year. This should recover to around 510p
to 520p either by close today or tomorrow. I've also added it to monitor
to see how it moves in the coming days and weeks, as it's possible it
may be trading some days behind currency movements, presumably the $US
being a key indicator. The potential gains from trading wont be as high
as RBS, but equally nor will the volatility or loss risks.

Personally I intend to continue trading RBS more in the coming weeks but
expect to secure a £250 to £500 small gain here.

BNZL is alright and of no concern. 550p to 560p being likely over the
next few days.

[das9] 16/4/2009 08:47

Toggle: what did the market expect? Margins to widen? There is a recession on.

[das9] 16/4/2009 08:45

Primrose: followed you from the RBS thread. Did you get in after the drop? Seems a violent reaction from a steady IMS. What's the yield on these?

edit: you did say 490 on your RBS post. Apologies!

[togglebrush] 16/4/2009 08:43

Reason for the Spike down ???

Margins under pressure at Bunzl
Date: Thursday 16 Apr 2009
LONDON (ShareCast) - Distribution and outsourcing group Bunzl said deteriorating economic conditions had put pressure on margins and depressed sales in the first quarter of 2009.

The company said that margin pressure was particularly noticeable in the UK & Ireland.

Underlying sales in the three months to 28 March were slightly down over the period, but with the effects of acquisitions and exchange rate gains thrown in, revenue increased by around 18% compared with the first quarter of 2008.

The group continues to generate cash and said it will continue to use diverse sources of funding to achieve its objectives. To this end the company has recently raised a further $300m from the US private placement market, with maturities ranging from five to ten years, resulting in total funding from this market of more than $800m.

[primrose] 16/4/2009 07:31

Difficult to see what money market makers/traders can gain from
currently shorting and MManipulating BNZL.. (?) Overdone.

This is a Buy.. Target 560p. Mid term 630p