Brambles boost first quarter sales 6pc

Brambles says a rise in first-quarter sales revenue was helped by strong performances in Europe and North America.

Brambles’ CHEP pallet service centre outside Melbourne. Pic: Bloomberg

Brambles has boosted its first-quarter sales six per cent, helped by a strong performance in the European pallets business and continued expansion of its IFCO business.

The company (BXB), which operates in more than 60 countries primarily through the CHEP and IFCO brands, says its sales revenue grew six per cent, on the prior corresponding period, to $US1.37 million.

Its European pallets business rose eight per cent, on a constant currency basis, driven by new business and solid existing customer demand in Western Europe.

But the company’s business in the Americas was still the main contributor, delivering $546.2 million in sales revenue, up five per cent on the period corresponding period.

Brambles said pallet sales revenue in Africa, India and the Middle East and the European automotive business also made a solid contribution to growth in the quarter.

In its IFCO business, benefits from North America and continued expansion with existing retailers in Europe helped drive sales up nine per cent in the quarter.

Chief executive Graham Chipchase said the company’s pallet and RPC businesses were enjoying strong expansion in Europe and making good progress in emerging markets such as Latin America, despite competitive environment conditions. “We continue to operate in a challenging operating and competitive environment, with cost pressures across our portfolio, particularly in our US pallets business,” Mr Chipchase said.

“We are focused on leveraging our global expertise to mitigate network cost inflation and strengthen our competitive advantage.”

In a statement to the ASX, the company also noted reports suggesting that law firm Maurice Blackburn may be assessing investor interest in a class action relating to the company’s first quarter trading update in October, 2016.

Brambles reaffirmed its 2017 earnings guidance on 20 October 2016 and again in its annual general meeting in November. But on January 23, 2017, it indicated that it would not meet the guidance, triggering a 15.8 per cent fall in the share price.

“Brambles has not received any formal communication nor has it been served with any proceeding and so is not able to comment further,” the statement said.

“However, Brambles strongly believes that it has at all times complied with its continuous disclosure and other regulatory obligations.”

With AAP