Signs of life in the shares of Brambles Ltd, the world’s number one pallet supplier.
Due to the requirements of being listed in London as well as Australia, it was forced to release what’s known as an Interim Management Statement to update shareholders on progress in the financial year.
It was pretty limited. All it said was:
"Brambles Group sales for the 10 months from 1 July 2007 to 2 May 2008 were 13% higher than the prior corresponding period (6% in constant currency), reflecting continued sales growth across all regions of the Group. Since releasing its 2008 half year results on 21 February 2008, Brambles has bought back 29.2 million shares for a total consideration of A$279.9 million."
"This is significantly earlier than the date on which Brambles would normally publish its trading update prior to the end of the current reporting period. As a result this IMS does not include all the matters that are included in Brambles’ normal trading update.
"Brambles will be providing the market with its usual trading update on 24 June 2008. In the interim, in order to comply with the above UK requirements, Brambles is releasing the attached IMS, which includes those details which are strictly required by relevant UK regulations."
The shares rose to $9.09, before easing to finish 10c higher at $9.01
BXB shares fell to a two-and-a-half year low of $8.25 last month after it said US retailer Wal-Mart was reviewing its use of pallets.
Brambles’ CHEP unit offers pallet management services to companies including Wal-Mart. The work involves tracking, retrieval and sorting of the large wooden trays used to carry and store merchandise. The news was forced out after the review was discussed in a trade media outlet. So far there’s been no result of the review.
Brambles earns an estimated 35% of revenue from its American pallet business, so any loss of Wal-Mart would be important.
Brambles said in February revenue grew 13% to $US2.1 billion in the first half, with sales from CHEP Americas up 11%, thanks to stronger demand for grocery products from major customers like Procter & Gamble , Kraft Foods and Kellogg.
The stock traded above $11 in January and as high as $14.93 last year when it was being stalked by Asciano in its abortive attempt to snuggle up and do a deal.
Asciano has sold off its stake and Brambles is now an ‘independent’ company.
It’s one of the companies whose returns will be hit by the stronger US dollar as it moved over 95 USc.
Brambles said in its interim profit statement earlier this year that the outlook for remains positive and the company expects to deliver solid sales and profit growth in 2008
"Brambles has performed well in the first half of the 2008 financial year, in a generally weaker global retail environment. The outlook for Brambles remains positive and the company expects to deliver solid sales and profit growth in 2008. Cash flow from operations will be strong, although lower than last year due to our continued investment in new growth opportunities.
"Overall, CHEP is expected to continue to perform well. Good progress is being made on new growth opportunities that place the company in an excellent position to accelerate profitable growth in the medium to long term."
