Bunzl has reported it is currently trading in line with expectations, after working alongside a macroeconomic backdrop that "remains uncertain".

The British distribution and outsourcing firm added that it is working to improve performance in the group, particularly in North America and continental Europe.

This comes after Bunzl’s operating profit dropped year-on-year, as a result of "operating margin decline driven by performance" in these regions.

In its latest trading update, the firm said its group revenue is expected to increase by 4% year-on-year, while its operating margin is set to be in line with its previous guidance at around 7%.

Furthermore, its operating profit decline is also expected to be in line with its guidance.

Chief executive officer at Bunzl, Frank van Zanten, said: "Alongside a macroeconomic backdrop that remains uncertain, the Group is trading in-line with our expectations. Actions are underway to improve performance in the Group, particularly in our largest business in North America and in Continental Europe, and we anticipate improvement in the second half of the year."

The update comes after the firm made its third acquisition of the year, purchasing Brazilian distributor of own brand packaging solutions, Solupack, for £15m.

As a result, Bunzl expects its leverage to be around two times by the end of June, in line with its aim to be towards the lower end of its target range of two and 2.5 time adjusted net debt to EBITDA by the end of 2025.

Van Zanten added: "I am also pleased to welcome Solupack to the Bunzl family today, our third acquisition of the year, with our pipeline remaining active. The Group's compounding growth strategy and resilient business model underpin Bunzl's long-term track record of delivery and the group continues to be well placed to navigate periods of macroeconomic uncertainty given our focus on essential products, the depth of our customer and supplier relationships and our sector and geographic diversification."

Investment director at AJ Bell, Russ Mould, said the latest update will calm the nerves of investors following previous statements.

He concluded: "After a shock profit warning in April amid North American weakness, investors are relieved that life hasn’t got any worse for Bunzl. The distributor is normally devoid of any drama, simply getting on with the task of delivering essential goods that companies need to do business, but not products they sell to their end customer.

"Rubber gloves, takeaway coffee cups, cling film; the products Bunzl supplies are the sort of things people take for granted. Its fortunes are closely tied to the global economy – if the world is ticking over then Bunzl will be busy but if there is economic weakness it will find life harder.

"Uncertain macroeconomic conditions mean that investors retain a sense of caution towards Bunzl. The shares are only up because there is no further bad news following the recent profit warning, rather than the market becoming more optimistic."

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