Bunzl upgrades 2026 guidance and launches £500 million buyback

The Tip Desk · September 1, 2026 · 2 min read

The distribution group reported underlying revenue growth of 3.2% for the first half of 2026.

Bunzl (BNZL), the specialist international distribution and services group, has upgraded its full-year 2026 guidance following a first-half performance characterized by margin expansion and growth across all regions. The company announced a new £500 million share buyback programme to be completed over the next 12 months, citing strong cash generation and a low leverage position.

Revenue for the six months ended 30 June 2026 rose 2.9% to £5,933.1 million. Excluding the impact of US IEEPA tariff refunds, constant exchange growth was 4.1%, with underlying revenue growth of 3.2%. This marks the fifth consecutive quarter of underlying revenue growth for the group.

Operating margin increased to 7.3% from 7.0% in the prior year period. The company attributed this expansion to the net impact of inflation in the second quarter, improved performance, and the annualisation of synergies from the Nisbets acquisition. However, the company noted that much of this first-half margin expansion is expected to be temporary.

Growth was led by North America, specifically within the Distribution business, which the company said reflects operational progress in restoring service levels. In Continental Europe, the group saw modest volume growth and margin expansion driven by inflation. The company also established a global partnership with adidas to distribute safety footwear, starting in Europe.

Financial flexibility has increased as adjusted net debt to EBITDA fell to 1.8 times, which is below the company's target range of 2.0 to 2.5 times. Free cash flow for the period was £327.8 million, an increase from £243.2 million in the comparable period, though this was primarily driven by US IEEPA tariff refunds.

Acquisition activity has been slower than typical year-to-date, with committed spend under £20 million compared to an average annual spend of approximately £300 million between 2020 and 2025. The company completed the acquisition of Scientifix Group in Australia in April and Ghessu Bath in Spain in July.

Looking forward, Bunzl now expects its 2026 operating margin to be broadly flat year-on-year compared to the 7.6% reported in 2025. The company continues to expect revenue growth at constant exchange rates to be driven by modest underlying growth, some inflation, and a small benefit from acquisitions. The board recommended an interim dividend of 20.8p, a 3% increase over the prior year.