Habgood completes Bunzl shake-up as earnings surge

Tony Habgood crowned 13 years as executive chairman of Bunzl by announcing a 16 per cent rise in profits, a demerger of the group's Filtrona cigarette filter business and a boardroom shake-up.

Since Mr Habgood arrived at the distribution and outsourcing group in 1991, he has increased sales from less than £500m to £2.9bn last year. He has focused the business from a diversified industrials group to the world's leading outsourcing group, supplying the food packaging, supermarket, catering and hotel industries. Under the shake-up he will hand over power and take up a role as part-time, non-executive chairman.

Announcing annual results yesterday for the 12 months to 31 December, Mr Habgood said the time had come to complete the restructuring process by demerging Filtrona, a fibre and plastics technology products company, into a stand-alone public company with a market value of about £500m.

After the demerger, set for June, Christoph Sander will be promoted from running Bunzl's European operations to chief executive, while Mr Habgood becomes non-executive chairman. Mark Harper will be the chief executive of Filtrona.

Mr Habgood has increased earnings per share at the company from 1p when he arrived to 34.4p last year.

Bunzl announced yesterday that dividends would rise 10 per cent for 2004 to 13.3p after a 14 per cent rise in sales to £2.9bn and a 16 per cent increase in operating profits to £230.8m.

Filtrona sales rose 12 per cent to £477m last year, while operating profit rose 13 per cent to £59m. Mr Habgood said: "These are strong results from both outsourcing services and Filtrona reflecting increasing momentum during the fourth quarter and a higher level of acquisition spend. They provide an excellent backdrop to the proposed demerger of Filtrona from the group."