REPORTING SEASON: Brambles Ltd (BXB)

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Figure 1: Brambles Ltd 12 month chart

 

Brambles (BXB) profit doubled as expected following transformation

·         2014 was a big year for Brambles (BXB) the company transformed itself from being an industrial conglomerate to becoming a logistics services company. BXB is now focused on becoming a global pallets and containers and transport solution provider after the demerger of the Recall information management business in December 2013.

·         In April 2014 Brambles advised the market that it was on track to meet its sales and revenue targets hence there were no real surprises in the result today. Brambles’ underlying profit increased by 5%, cash flow from operations also increased by US$130.9Million while margins fell slightly by 0.2% over the year.

·         Revenue from pallet sales increased in the Americas (up 4%) boosted by organic volumes, price and new business growth. European, Middle Eastern & African sales also lifted, up 7%. But sales fell away in the Asian pacific region largely due to a small fall in sales in Australia and New Zealand, down 6% while Asian sales revenue lifted by 6% to US$54.7Million.

·         Brambles said today it expects to see an improvement in return on capital invested in FY15. Subject to unforeseen circumstances, BXB is targeting annual sales revenue growth in the high single digits with consistent incremental improvement in return on capital invested to at least 20% by FY19

·         BXB will pay a 2H dividend of $0.135 -in line with market expectations- and aligning with BXB’s promise to not reduce its dividends after the Recall demerger.

 

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Juliana Roadley, Market Analyst,