earnings growth on track Brambles' palatable performanceOctober...

earnings growth on track Brambles' palatable performance
October 26, 2005

BRAMBLES - the world's largest supplier of wooden pallets for storage and transport - said yesterday that the group had performed well in the early part of the financial year.

"We continue to expect further good progress in profit and solid cash generation in the year ahead," Brambles said in a statement to the Australian Stock Exchange. "In the three months to the end of September, sales and profits are well ahead of the comparative period in the prior year."

In August, Brambles announced a 72 per cent lift in annual net profit to $528.8 million for 2004-05.

Looking ahead, Brambles said its core pallet business, Chep, was expected to perform particularly well this financial year.

"Overall, Chep is expected to deliver good growth in all regions in 2006, driven by continued sales growth and continuing benefits from operational improvements," the company said.

Chep had performed strongly in all regions in the three months to September 30.

"Chep America's sales were 10 per cent higher than the prior comparative period and profits continued to gain from ongoing efficiency improvements," Brambles said.

"In Chep Europe, sales growth for the three months to September was 5 per cent.

"Customer conversions to the new pricing architecture have continued at a steady rate and profits have benefited from continuing operational efficiencies."

Chep in the rest of the world also continued to trade well.

At waste management business Cleanaway, the divestment of the German operations are expected to be completed early next year, subject to approval from the relevant competition authorities in Europe.

Brambles announced the sale of Cleanaway Germany to German waste management group Sulo for $893 million earlier this month.

Continuing Cleanaway operations in Britain and elsewhere were on track to show a "marked improvement", with a particularly strong first half, Brambles said.

"Cleanaway UK is showing improvements in its commercial and industrial business and is gaining from the restructuring which took place last year," the company said.

Document management business Recall was also predicted to lift profits this financial year.

"In Recall for the first three months of the year, Europe continued to make solid progress," Brambles said.

"North America saw slower sales growth and some impact on results from higher fuel costs."

The industrial services business and other regional operations had also performed strongly in the first quarter, Brambles said.

Brambles shares, which finished trading before the release of the quarterly update, closed 13c higher at $8.33.

AAP