Bunzl sees supply chain constraints as manageable, raises 2021 sales forecast

By Federico Maccioni

(Reuters) -Bunzl Plc, the British distribution and outsourcing group, said on Tuesday it was facing supply chain disruptions much like the rest of the industry but its chief executive told Reuters they were manageable.

The company, which supplies food packaging, latex gloves, work wear and stationery to businesses, has experienced some indirect effect from pressures in the safety and construction sector, CEO Frank van Zanten said.

"We haven't seen big issues in terms of supply issues, we have been able to deliver to our customers in a normal way," he said. "I think that the safety sector is still under a bit of pressure ... we expect it to unwind and normalise probably somewhere in 2022".

Van Zanten said: "Let's say we do see some constraints," but he said they were workable.

His comments came after the company forecast slight sales growth for 2021, thanks to a strong recovery in its base business in North America, which helped it to report 2.5% underlying revenue growth in the third quarter to the end of September.

Bunzl reported a drop in sales of some of its COVID-19 products, mainly masks, disposable gloves and face shields, van Zanten said.

The company, which also supplies cleaning chemicals to the retail and hospitality industries, was helped by its latest acquisitions and a few extra trading days in the period.

"Our acquisition pipeline remains active, supported by the strength of our balance sheet," van Zanten said in a statement, adding that the company completed the acquisition of Intergro at the end of last month to support its agricultural business.

Bunzl's were up 0.4% to 2,596 pence at 0945 GMT, after rising as much as 3.2% earlier in the session.

Bunzl did not change its margin outlook for the year, saying that 2021 continues to reflect pandemic-related dynamics.

(Reporting by Federico Maccioni in Gdansk and Pushkala Aripaka in Bengaluru, Editing by Rashmi Aich, Sherry Jacob-Phillips and Jane Merriman)