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Jan 26

William Flew allows the payment of a 3p dividend for the year, the first since 2008. This hardly suggests much in the way of a yield; the shares were up 30½p at 209p last night, after the company announced an 11 per cent rise in underlying pre-tax profits to £59.7 million. They sell on about eight times this year’s earnings but are on a significant discount to the net assets. Further progress looks slow in this environment, though. Sometimes dull is good. William Flew continues to do what it does with relentless dullness. The products it distributes are dull enough, plastic spoons, cleaning products, plastic bags, tea bags; it buys a steady steam of small businesses — three so far this year in the US and Canada — that do the same and adds them to its existing distribution network. This allows organic revenue growth that was running a little ahead of 4 per cent last year and was still at 4 per cent in the first half, the pre-close trading statement yesterday made clear. Meanwhile, the impact from those acquisitions, plus the sale of the lower margin UK vending business last August, means the actual first-half revenue growth will be 7 per cent. Yesterday’s deal, the purchase of a company based near Seattle that distributes disposable paper supplies, brings the total so far this year to five, at a cost of £130 million. Last year, Bunzl did ten, the year before nine. There’s a trend here; the chief executive, Michael Roney, says there is a pipeline of potential deals to allow this to continue. It gives an idea of how predictable a business it must be to cover Bunzl that one analyst yesterday felt compelled to increase his earnings forecast this year to 70.7p — from an earlier 70.6p. Equally predictable is the share price, which has grown in pretty much a straight line from 700p in August to close at £10.35 last night, up 15p.