UK's Bunzl forecasts modest profit growth, improves margin outlook

Sept 1 (Reuters) - British business supplies distributor Bunzl on Tuesday forecast modest growth in adjusted operating profit this year, supported by improved performance in its North American business and price increases.

Here are a few details:

• The update comes after U.S. activist investor Elliott reportedly built a stake in Bunzl, as the company pushes ahead with a turnaround of its North American business, its biggest market, and raises prices to offset rising costs linked to the Middle East war.

• Bunzl now expects its operating margin at constant exchange rates to be broadly in line with the 7.6% reported in 2025. It had previously forecast a slight decline.

• Shares in the FTSE-100 listed company rose nearly 3% to £28.62 in early trading.

• Growth in North America was led by its distribution business, which benefited from new customer wins, improved service levels and higher volumes.

• Inflation also supported first-half margins, though the company said much of that benefit was likely to be temporary.

• "The macroeconomic backdrop remains uncertain with challenging end markets and volatile input prices," CEO Frank van Zanten said in a statement.

• Bunzl also announced a £500 million ($677 million) share buyback.

• Adjusted profit before tax rose 8.9% at constant exchange rates to £380.9 million in the six-month period ended June 30.

($1 = £0.7386)

(Reporting by Neeshita Beura in Bengaluru; Editing by Sherry Jacob-Phillips)