Distribution specialist Bunzl has confirmed trading remains on track with expectations ahead of its half-year results, though the company warned operating margins will fall short of last year’s performance.

The FTSE 100 group expects revenue for the six months to 30 June to rise approximately 4% as acquisitions drive revenue higher. Underlying sales remain broadly flat.

Operating margins are set to hold steady at around 7.0% for the half-year, matching previous guidance. This represents a continuation of pressure on profitability that has weighed on the business in recent quarters.

Looking ahead to the full year, Bunzl maintained its cautious outlook after a warning earlier this year.

While the expects moderate revenue growth in 2025, operating margins are forecast to slip “moderately below” 8.0% for the year, down from 8.3% achieved in 2024. This will be a mild concern for investors, but won’t be a shocok given current inflationary conditions.

“After a shock profit warning in April amid North American weakness, investors are relieved that life hasn’t got any worse for Bunzl,” said AJ Bell investment director Russ Mould.

“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.”

Management highlighted that second-half margins typically improve due to seasonal factors and should benefit from remedial actions already taken.

The FTSE 100 spiked higher on Tuesday after Iran and Israel announced a ceasefire following a twelve-day conflict.

Oil prices dropped sharply on Tuesday and are now trading back near levels seen before Israel launched strikes on Iranian nuclear facilities in early June. 

The ceasefire was announced after Iran launched a dramatic retaliatory strike on a US airbase in Qatar, which didn’t cause any casualties.

Iran’s attack on Qatar meant Iran didn’t lose face while avoiding wider escalation. Donald Trump even thanked Iran in a social post after Iran warned the US of the impending strike.

With the worst of the conflict behind us, markets breathed a sigh of relief and London’s leading index spiked 0.5% higher in early trade.

“Risk assets are back on the menu after President Trump announced a ceasefire has been brokered between Israel and Iran. The details may still be a little up in the air, but global stock markets are pushing higher as a result,” said Matt Britzman, senior equity analyst, Hargreaves Lansdown.

Cracks were appearing in the ceasefire on Tuesday with reports of Iran breaking the agreement and Israel promising to strike back. But markets were largely unfazed and remained happy with a broader step down in tensions.

Markets tend to focus on one big issue at a time, and now that Middle East tensions are subsiding, attention will likely shift back to growth and the ongoing battle with inflation.

However, for now, at least, there was a sense of optimism in the market, and 83 of the FTSE 100’s constituents were trading higher at the time of writing.

There were no surprises in the top risers and fallers on Tuesday. 

The falling oil price weighed heavily on BP and Shell, with the two acting to offset gains elsewhere. BP was the FTSE 100’s top faller with a decline of 5%. Shell lost 3%.

Lower oil prices and the prospect of a reduction in disruption to airspaces in the Middle East were welcomed by investors in airlines EasyJet and IAG. Both shares were 6% higher at the time of writing. 

Hotels group IHG shares the positive sentiments and rose more than 3%.

“Defensive stocks, oil producers and precious metals miners were all under pressure in early trading. Gold slipped back as its safe-haven attributes were less in demand. This rather clipped the wings of the FTSE 100 given its relatively heavy weightings in these areas and saw the index underperform its European counterparts,” said AJ Bell investment director Russ Mould.

Mobico has confirmed it expects adjusted operating profit of £180-195 million for the financial year 2025, excluding contributions from its North American school bus business, which is set to be disposed next month.

The group’s adjusted operating profit forecast is largely in line with last year’s £187m operating profit. 

The transport group, formerly known as National Express, also provides an update on the sale of its North America School bus division.

Mobico announced in April that it had agreed to sell its North America School Bus division to I Squared Capital for up to $608 million (£457 million). The deal is expected to close in July following final approval from the US Surface Transportation Board, which has already given tentative authorisation.

Mobico expects to receive net proceeds of approximately £275-290 million from the sale. The company said it maintains strong liquidity with no significant debt maturities until the second half of 2027, with the bus business sale providing sufficient funds to cover those obligations.

The company said a full update on cash flow and leverage will be provided once the transaction completes.​​​​​​​​​​​​​​​​

The North American Bus Company accounts for a large proportion of Mobico’s North America revenue but only generated $11.5m in adjusted operating profit in 2024.

Mobico have struggled to generate any meaningful cash flows from the business despite injecting £200m in capital investment.

Mobico shares were 3% higher at the time of writing.

The FTSE 100 was steady on Monday as investors reacted to US strikes on Iranian nuclear facilities over the weekend that mark a major escalation in the Middle East conflict.

Oil prices rose and equities fell on Monday. However, with Iran yet to respond militarily, the gains in oil were limited, and stock declines were contained. London’s leading index reversed early losses to trade flat at the time of writing.

The big risk for markets is Iran closing the Strait of Hormuz, through which around 20% of the world’s oil passes. Some analysts have predicted that the closing of the channel between Iran and the UAE would send oil prices above $100.

The US has reportedly asked China to intervene and help prevent Iran from closing the Strait of Hormuz. China receives a huge amount of oil from the region and would be hit economically by higher oil prices and supply disruption.

“There is a tense mood on financial markets as investors assess the potential repercussions of the US attack on Iran. Investors had breathed a sigh of relief on Friday as it appeared a two-week window had opened when a diplomatic solution could be pursued, so the weekend’s military action has knocked sentiment,” said Susannah Streeter, head of money and markets, Hargreaves Lansdown.

Investors’ major concern is that further escalation will lead to higher oil prices and energy bills that will stoke inflation and weigh further on slowing economies.

“At a time when there were signs that inflation was becoming a little less troublesome, the geopolitical situation has added a slick of fresh uncertainty into the mix, pushing up energy prices.” Streeter said.

BP and Shell were again higher. No surprise there.

Convatec was the top riser after being added to JPMorgan’s ‘positive catalyst watch’. Shares were 2% higher.

Bargain hunters stepped into Berkeley Group after a poor session on Friday, sending shares 1% higher.

JD Sports shares were the FTSE 100 top faller with a 1.7% decline. The threat of higher household bills as a result of rising oil prices will do no favours for retailers that are already contending with tariff uncertainty. JD Sports couldn’t be more exposed to Trump’s tariffs or fluctuations in discretionary spending.