Brambles on Track to Meet Full-Year Forecast

Shares in global logistic giant Brambles traded higher yesterday after a strong third quarter update saw it on track to meet full-year guidance.

The company told the ASX its revenue from continuing operations had risen 8% to $US3.79 billion ($4.89 billion) for the first nine months of the June 30 year from the same period of 2019-20.

The 8% rise was in actual currencies while on a constant currency basis (which Brambles prefers to highlight), revenue was up 6%.

Brambles said volume growth improved 3% on increased demand in the global pallets and Australian reusable plastic containers units. That offset weakness in the automotive sector, with all businesses cycling pre-pandemic trading conditions in the prior year.

It said it saw price growth of 3%.

Sales revenue rose 7% in the Americas on a constant currency basis and 8% in Australasia.

As a result, full year expectations for underlying profit growth, sales revenue, free cash flow, and the dividend payout ratio are unchanged.

Brambles shares rose 2.5% to $10.67, closing close to the day’s high of $10.68.

Brambles said it expects challenges in forecasting demand to continue and higher-than-expected lumber inflation (lumber prices have surged in the US and other markets because of the home building boom), while pallet sales revenue growth is expected to slow as the business cycles record levels of demand following the outbreak of COVID-19 in 2020

The second half of 2020-21 is expected to benefit from higher margins in the US pallets business, reflecting ongoing price realisation and continued delivery of automation, pallet durability and procurement benefits.

 

Glenn Dyer

About Glenn Dyer

Glenn Dyer has been a finance journalist and TV producer for more than 40 years. He has worked at Maxwell Newton Publications, Queensland Newspapers, AAP, The Australian Financial Review, The Nine Network and Crikey.

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