BXB Brambles Limited

   By Stuart Condie 
 

SYDNEY--Brambles Ltd. upgraded its annual sales and profit guidance after North American price increases helped the pallet supplier offset inflationary pressures and lift revenue for the first nine months of its fiscal year by 7.2%.

The Australia-listed company on Thursday said that it had generated continuing operations revenue for the nine months through March of $4.07 billion, compared with $3.79 billion for the same period a year earlier. Revenue in North America jumped by 11% and accounted for more than half total revenue.

Brambles said it now expects full-year sales revenue to rise by 8-9%, on a constant currency basis. It sees underlying profit growing by 6-7%, and by 11-12% once $50 million of short-term transformation costs have been stripped out.

It previously guided for 3-5% underlying profit growth off a 6-8% increase in revenue.

Brambles said that price increases at its CHEP Americas unit had recovered record levels of input cost inflation across the region. Chief Executive Graham Chipchase said Brambles was dealing with pallet scarcity and what he called extraordinary lumber inflation, with supply-chain difficulties now exacerbated by the conflict in Ukraine.

"Ongoing disruptions in global freight and lumber markets continue to impact the flow of goods across supply chains, resulting in higher costs across our business," Mr. Chipchase said.

Brambles is continuing its plastic pallet trials with Costco Wholesale Corp. and is on track to decide on whether to proceed with the project by the end of the current fiscal year on June 30.

The company tweaked its annual free cash-flow guidance to a net outflow of between $300 million and $350 million, compared with previous guidance for a net outflow $350 million, on the expectation of increased earnings. It expects to complete its share buyback in the current fiscal year and for dividends to be in-line with its payout policy.

Write to Stuart Condie at stuart.condie@wsj.com

(END) Dow Jones Newswires

April 20, 2022 19:16 ET (23:16 GMT)

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