Insider: director spending spree at Bunzl and Barratt Redrow

Bunzl (LSE:BNZL) directors including chief executive Frank van Zanten have spent £1.4 million backing a recovery for shares in the wake of Wednesday’s shock profit warning.

The trio’s investments at prices not seen in four years were made after a 26% slump wrecked the company’s reputation as a solid and dependable member of the FTSE 100.

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The workplace supplier of essential not-for-sale products and services slashed 2025 guidance due to tougher conditions and operational challenges in its largest region of North America.

Underlying revenues for the group declined 0.9% in the first quarter, while it now expects an operating margin for the year moderately below 8% compared to 8.3% in 2024.

Analysts cut profit forecasts by about 10%, with earnings per share expectations further impacted by the company’s decision to pause its share buyback programme.

The stock closed last week at 2,288p, which compares with the new price targets of JP Morgan and Barclays at 2,700p and 3,100p respectively. They were 3,500p and 3,650p previously.

Van Zanten, who has run the business since 2016, said the company has already taken decisive action to improve performance. This included in North America, where leadership changes have been made to ensure a renewed focus on commercial agility and operational excellence.

He added: “Overall, my confidence in the group's compounding growth strategy and resilient business model remains unchanged, supported by our continuous focus on improving our offering to customers.”

Van Zanten referred to the group’s long-term record of delivery and its positioning for periods of macroeconomic uncertainty, due to its focus on essential products and the depth of its customer and supplier relationships.

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The group, which listed on the London Stock Exchange in 1957, dates back to 1854 when Moritz Bunzl opened a small haberdashery business in Bratislava.

It has increased its dividend for 32 years in a row, with the next payment due on 2 July when Bunzl distributes 53.8p a share as part of an 8.2% increase in 2024’s total to 73.9p.

At constant exchange rates Bunzl has seen adjusted earnings per share increase by 54% over the last five years, during which time it committed £2.6 billion to acquisitions. Bunzl said last week that its approach to dealmaking is unchanged.

Van Zanten disclosed £1.1 million of share purchases at prices near 2,335p, while finance boss Richard Howes and corporate development director Andrew Mooney also declared investments.

Stakebuilding at this blue-chip

Buyers of Barratt Redrow (LSE:BTRW) shares last week included the company’s own finance director after the newly-merged housebuilder boosted confidence with a robust trading update.

The shares closed Thursday’s session near a two-month high at 444.3p, having fought back from their two-year low of 392p seen just over a week earlier.

The 9% rally in a stronger week for stocks across the sector came as Barratt said it remained on track for completions between 16,800 and 17,200 homes in the year to 30 June.

It added that the operational integration of Barratt and Redrow following last year’s merger is nearing completion, and that by 2026 it will have capacity to deliver 22,000 homes a year.

The company added that efforts to unlock the full potential of its enhanced land position have been boosted by the government’s proposed planning reforms.

Chief executive David Thomas told investors last week: “The fundamentals for our industry remain strong, with a clear need for new homes across all tenures and a national focus on accelerating delivery.”

His finance boss Mike Scott, who joined the company in 2021 after previous roles at Countryside Properties and Sainsbury’s, backed up the comments by spending £20,000 on shares.

The purchase took place at 436p, having seen shares drift from 494p in October as economic and interest rate uncertainty outweighed the impact of planning reforms.

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Peel Hunt, which has an Add recommendation and price target of 540p, believes that moves on mortgage rates will be a key swing factor for demand in the next 12-18 months.

It added: “We expect new housing activity to recover steadily from here but the pace of improvement remains uncertain for now until there is more  clarity on the speed of rate cuts and/or some demand-side initiatives are introduced by the government.”

Broker Morgan Stanley reiterated its ‘overweight’ stance on the shares following last week’s update, highlighting the housebuilder as a ‘top pick.’

Bank of America also favours the stock, alongside Taylor Wimpey (LSE:TW.), as it recommends investors focus on players with good land banks or cheap valuations.

Barratt trades on 9.6 times forecast 2027 earnings, a valuation the bank said is unjustified given the company’s clearer mid-term growth visibility and support of synergies and scale advantages. It also expects the dividend to grow from this year.