Bunzl Pre-Close Statement and Acquisition of International Retail Packaging Business

13 Dec 2006

Bunzl plc, the international distribution and outsourcing Group, is today updating the market prior to entering the close period for the year to 31 December 2006 and announcing a significant acquisition in international non-food retail supplies.

With respect to the market update, the Company indicates that:

• Overall trading in 2006 is expected to be in line with our expectations.
• Revenue in North America continues to progress well with underlying growth in US dollars in the second half returning to historical levels in a more stable pricing environment. While there have been continued operating improvements from acquisitions made in 2005 and benefits from the acquisitions completed this year, the depreciation of the US dollar will have a negative translation impact on the full year results.
• Overall underlying performance in the UK & Ireland has improved in the second half due to a combination of revenue growth and the impact of cost reduction initiatives implemented in the first half. Southern Syringe, acquired in July 2006, is operating as expected at considerably lower than the Group's average margins and the integration is proceeding as planned.
• Overall revenue in Continental Europe has continued to develop well. Although the businesses outside France, as a whole, are performing well, the margin pressures in France in the first half have continued.
• In Australasia strong overall revenue growth has resulted from a combination of moderate underlying performance and the effect of recent acquisitions.

Bunzl also announces that it has acquired Keenpac Group Limited and its subsidiaries from Glynn Bradshaw, other employees of Keenpac and Uberior Investments plc, an investment vehicle of Bank of Scotland Corporate.

The business, which is based in Leicester, is involved in the sale and distribution of quality retail packaging principally in the UK and the US but also in France, Italy, Switzerland, Hong Kong and Australia. Products, which are predominantly sourced from Asia, include bags and boxes for a variety of customers including luxury brands and high street retailers.

Keenpac's consolidated revenue in the year ended December 2005 was £73.6 million and the gross assets acquired are expected to be approximately £54.9 million.

Commenting on the acquisition, Michael Roney, Chief Executive of Bunzl, said:

"Keenpac is an excellent international company which significantly expands our sales of non-food retail supplies, broadening our product offering and customer base, extending our sourcing capabilities and providing an opportunity to develop our business in countries where we do not currently have a presence. I am delighted to welcome the management team and all the staff of Keenpac to Bunzl".

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