BUSINESS LIVE: CMA investigates eight homebuilders; Bunzl buys Nisbets; Hipgnosis legal problems

Matt Britzman, equity analyst, Hargreaves Lansdown:

‘Bunzl is the steady vortex you may never have given a second glance. Far from being a glamorous headline-setter, Bunzl continues to sell essential goods and find margin-boosting acquisitions – and the company is very good at that.

‘There has been some sales weakness over the past year, a mix of declining volumes in some regions and normalization of prices. Much of Bunzl’s prices are correlated with inflation, so as the costs for the underlying raw materials fall, Bunzl’s sales also fall. The important thing to remember is that sales are still about 28% higher than 2019. Looking ahead, volumes should return, but price weakness is a potential headwind for the new year.

‘Strong cash generation and improving margins were highlights of last year. Acquisitions continue to do a large part of the work. This approach carries additional risk, but in a highly fragmented sector the deal pipeline is thick and Bunzl is an expert at finding companies with good margins at decent prices.

‘As a defensive growth company there is a lot to enjoy. If Bunzl can manage the ongoing price weakness, the pipeline of acquisitions can do its job to support margins in the coming year.”

Investors will be encouraged to commit more money to women-led start-ups under government-backed schemes.

Female founders receive just 2 percent of all venture capital in Britain – a statistic that has remained stubbornly low.

Bunzl has bought catering equipment and consumables distributor Nisbets in Britain for £339 million, the distribution group said on Monday, as it warned its operating margin this year would be slightly below 2023 levels.

The London-listed company said it had a slower-than-expected start to the year in North America but expected to post modest revenue growth in 2024, helped by a slew of acquisitions last year.

It also acquired Finnish company Pamark, Bunzl said in a statement.

Heathrow has denied it is shelving plans for a third runway as passenger numbers continue to rise.

Europe’s busiest airport has pushed back against reports that CEO Thomas Woldbye wanted to scrap the expansion and was in the process of disbanding the team in charge of it.

In a statement last night, Heathrow said the claims, first reported by The Sunday Times, were “wrong” and “not reflective” of its strategy.

Britain’s competition watchdog has launched an investigation into eight housebuilders after finding evidence suggesting the possible sharing of commercially sensitive information between competitors.

The Competition and Markets Authority said sharing sensitive information could affect site development and the prices of new homes.

“While the CMA does not consider information sharing to be one of the key factors in the ongoing under-delivery of housing, the CMA is concerned that this could weaken competition in the market,” the regulator said in a statement.

The companies include Barratt, Bellway, Berkeley, Bloor Homes, Persimmon, Redrow, Taylor Wimpey and Vistry.