Brambles (BXB) SNAPSHOT
Profile: Brambles (BXB) is a global supply-chain logistics company. BXB manages the world’s largest pool of reusable pallets, crates and containers. The company operates a ‘share and reuse’ model known as pooling. Its platform is used by various supply chain participants such as producers, manufacturers and retailers.
History: BXB was established in 1875 as a butchering business, and in 1877 established a butchery business in Newcastle, slowly expanding its transport and logistics capability. The company listed in 1954, and in 1958 bought CHEP (Commonwealth Handling Equipment Pool) from the Australian government. BXB demerged its information management business, Recall Holdings, in 2013. In May 2019, BXB completed the sale of its IFCO RPC pooling business for c.US$2.5bn.
Earnings composition: The CHEP EMEA segment reported US$442m in underlying Earnings Before Interest and Tax (EBIT), or 51% of FY19 segment EBIT. CHEP Americas reported US$298m, or 35% of segment EBIT, while CHEP Asia-Pacific reported US$118m (14%).
Most recent result – FY19: Underlying EBIT declined 3% on the prior corresponding period (pcp) to US$804m (up 2% on a constant currency basis). The result was driven by sales revenue increasing 3% on the pcp (7% increase on a constant currency basis) which was offset by increased global input-cost inflation and cost challenges in the CHEP Americas businesses. Underlying earnings per share (EPS) was down 3% on the pcp to US$0.32. The final dividend of A$0.145 (full year dividend of A$0.29) was maintained, in line with the pcp.
Company outlook: BXB intends to return c.US$1.95bn of proceeds from the sale of the IFCO RPC pooling business, comprising: 1) c.US$300m return of cash through a A$0.17 per share special dividend and A$0.12 per share capital return, subject to approvals; and 2) an on-market buyback of c.$US1.65bn, which is expected to be completed in FY21 (c.A$77m bought back to date). BXB expects FY20 sales revenue growth to be “at the lower end of mid-single digit growth objective”. Underlying profit growth is expected to be in line with sales.
Important dates: Ex-dividend date is 11 September 2019. Payment date is 10 October 2019. AGM is scheduled for 10 October 2019. 1H20 results are scheduled for mid-February 2020.
Enter your email address below to download the full PDF Snapshot.