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* Reports rise in first-half profit
* Flags labour and material shortages
* Shares down 2.5%, among top losers on FTSE 100
(Adds shares, CEO comments from interview, background)
By Aditi Sebastian
Aug 31 (Reuters) - Business supplies distributor Bunzl
on Tuesday flagged labour crunches in its key markets
including the United States and Britain and said it was also
facing shortages in the products it delivers to the grocery and
hospitality sectors.
Shares in the British-based FTSE 100 group, which provides
everyday items such as disposable tableware, food packaging,
latex gloves and stationery to business customers, were down
2.5% by 0746 GMT.
Several companies in Britain including McDonald's
and Greggs have been hit by pandemic-related supply
chain interruptions, including delivery delays and a shortage of
staff and truck drivers that are crippling distribution and
availability of produce.
Bunzl, which also supplies products ranging from
counter-service packaging to cleaning chemicals to the retail
and hospitality industries, said it was seeing material
shortages in its food service and consumables sectors as
suddenly surging demand after coronavirus lockdowns eased called
for catch-up production.
"So far, (the labour shortage is) not extreme and because we
also see product inflation in certain areas and we focus really
on efficiencies (as well), we have been able to mitigate that in
a good way but it may be a little bit more, back there in the
second half," Chief Executive Frank van Zanten to Reuters.
He expects labour shortages to ease as temporary
unemployment benefits introduced during the pandemic are set to
end in the United States.
Bunzl reported a 17.5% rise in first-half adjusted pre-tax
profit to 338.4 million pounds ($466.92 million) and increased
its dividend by 2.5%, helped by a recovery in demand as
businesses such as offices, hotels and restaurants reopen.
The company said wage inflation and delivery costs in the
first half were offset by product inflation in COVID-19 related
items such as disposable gloves. However, it said that COVID-19
related items were starting to see a price deflation in the
second quarter.
The company, known for making several bolt-on deals, on
Tuesday also announced two new acquisitions of safety equipment
distributors in Spain.
($1 = 0.7247 pounds)
(Reporting by Aditi Sebastian and Yadarisa Shabong in
Bengaluru; Editing by Rashmi Aich and Susan Fenton)
