Business Services Weekly

Research evidence excerpt

Business Services Weekly

is

reportedly seeking Bunzl to undertake a 10% buyback over the next 12

months, and conduct a strategic review with a focus on its North American

business (48% of group profit). We recognise these measures could help

close its valuation discount but equally still believe it can be closed without

radical changes through ongoing delivery, capital deployment into bolt-

ons, and a continued market reappraisal of its international growth

opportunity and defensive compounding characteristics.

n XPS Pensions FY26 results were just ahead of our expectations, with

revenue +13% (organic +8%) - a fourth year of double-digit growth.

Advisory revenue was +8% underlying while Administration was +18%.

Growth benefited from new mandates and an expansion of work with

existing clients. Adjusted EBITDA was +9% - c.2% ahead of expectations -

with an adjusted margin +70bps to 28.8% as earlier costs efficiencies offset

greater administration activity and the impact of higher employee national

insurance costs. ND/EBITDA of 0.6x provides scope for further organic and

inorganic investment. An unchanged outlook is supported by high visibility

(90% of revenue) including risk transfer, surplus extraction management,

GMP, the onboarding of the Metropolitan Police and SEI administration

contracts. Additionally, we believe XPS has a significant pipeline of

opportunities in public sector administration.

n IWG's current CEO and founder Market Dixon announced he will become

Executive Chairman. Christian Schmitz, who has been chief transformation

officer since last year, is appointed as CEO. He joined from McKinsey and

has been a director at KKR Capstone, and was previously CEO at Selecta for

6 years. IWG also increased the size of its €300m 5.125% Eurobond due

2032, to €500m.