* H1 pretax profit 115.5 mln stg vs 110.8 mln stg
* Cautious on revenue in H2, optimistic on margins
* Has 400 mln stg headroom, wants to make acquisitions
* Shares 1.5 pct up in early trade (Adds company comment, shares, details)
By Rhys Jones
LONDON, Aug 24 (Reuters) - British distribution group Bunzl reported a 4 percent rise in first-half profit but said the tough economic environment would continue to put pressure on sales and profitability, especially in the UK and Ireland.
Bunzl, which supplies supermarkets, hotels, hospitals, and offices with products ranging from carrier bags to toilet rolls, posted a pretax profit of 115.5 million pounds ($191.3 million) for the six months to the end of June on sales 17 percent higher at 2.29 billion pounds.
"We're cautious on revenue but a bit more optimistic on margins and costs going forward. We took a hit of around 15 percent in currency translation in the first half but that should be less in the second half," Chief Executive Michael Roney told Reuters in an interview.
Shares in Bunzl, which have lost 17 percent of their value so far this year, were 1.5 percent up at 561.5 pence in early trade, valuing the group at around 1.8 billion pounds.
The consensus forecast of eight analysts polled by the company showed Bunzl was expected to report an average pretax profit of 112.2 million pounds in the first half.
Bunzl said sales and profit in the UK and Ireland were down 4 percent and 37 percent, respectively, but that cost-cutting measures would help improve its performance in the second half.
"The UK fell off a bit and is our least resilient business area but we expect around 10 million pounds of cost savings to come through in the next six months, a lot of which will be in the UK," said Roney.
Market expectations for full-year underlying pretax profit range between 250 million pounds and 273 million pounds, with the consensus at 263 million, according to a Reuters Estimates poll of nine analysts.
"If we weren't comfortable with the numbers out there we would have to say something and we're not saying anything different," said Roney.
Bunzl, which recently raised $300 million from private placements in the United States, said it has over 400 million pounds of headroom and is looking to make acquisitions.
"There are different expectations between valuations of sellers and buyers but we have firepower and we want to use it for acquisitions," said Roney. (Editing by Mark Potter; Editing by Rupert Winchester) ($1=.6038 Pound)