Bunzl sharply higher on buyback, results (Il Sole 24 Ore Radiocor) - Milan, 27 Aug - In London, Bunzl was up 7.72% after the UK distribution and outsourcing group announced a share buyback and its first half results.

The company announced an initial 250 million pound share buyback that will commence with immediate effect, to be completed no later than March 3, 2025. The board expects to announce a further share buyback of about 200 million pounds at its 2024 preliminary results, it added.

Bunzl is committed to allocate about 700 million pounds a year, primarily to invest in value-accretive acquisitions and, if required, returns of capital, for the three years ending December 31, 2027.

If at the end of each year, the total committed spend on acquisitions is below 700 million pounds, the group will return the remainder to shareholders through a capital return in the following year, it added.

The news is "likely to be well-received in the short term, but some [are] likely to question whether this marks a tacit admission that the absolute level of M&A spend--on which Bunzl is heavily dependent for growth--is struggling to keep up with the size of the group," according to RBC Capital Markets.

Bunzl also said that in the six months ending June 30 revenue fell 3.3% to 5.712 billion pounds. At constant exchange rates, the top line dropped 0.4%.

The adjusted operating profit rose 3.9% to 455.5 million pounds and adjusted earnings per share grew 2.8% to 90.8 pence.

The company announced an interim dividend of 20.1 pence per share, up 10.4% from a year earlier.

The company expects adjusted operating profit in 2024 "to show a strong increase in comparison with 2023," at constant exchange rates.

In Milan, Enel rose 1.00% after Goldman Sachs increased the target price of the Italian power generator and confirmed its 'buy' recommendation. The broker increased the target price to 9.20 euros from 9.00.

In Frankfurt, Continental was up 4.13% after UBS increased its recommendation to 'buy' from 'neutral' and increased the target price to 80 euros from 67 euros for the German tyre and auto component manufacturer.

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(RADIOCOR) 27-08-24 11:57:38 (0262) 5 NNNN