US arm lifts Brambles profit

The world's top pallet supplier Brambles Industries stacked a near 30 per cent rise in first-half profit yesterday, driven by the American arm of its CHEP pallet leasing unit, and it gave a positive group outlook.

The Anglo-Australian group, in the midst of a major restructuring, said CHEP, which leases 200 million pallets used to shift goods around the globe, was growing strongly and praised the "outstanding" results from the unit's American business.

The company said its focus for 2006 would be to offload the remaining units of its Cleanaway waste management business and create "the new Brambles", based on CHEP and its data management arm Recall, to begin trading by the end of November.

Commonwealth Securities senior industrials analyst Matt Crowe said Brambles' net profit of A$265.5 million ($296.6 million) - before one-offs and with discontinued operations - was better than his forecast of A$261 million, with CHEP making up for Recall's poor result.

Crowe said: "The result highlights the differences between Recall and CHEP."

CHEP was a far more profitable business and resilient to changes in the economy than Recall, he said. "One suffered from economic conditions and the other one hardly felt a scratch.

Brambles chief executive David Turner told the Australian Stock Exchange: "We expect good progress in profit and solid cash generation in the second half."

Shares in Brambles, which have risen nearly 23 per cent since June 30, were up 1.5 per cent at A$10.07.

Brambles plans to create a new holding company for CHEP and Recall with a primary listing on the Australian Stock Exchange and secondary listing on the London Stock Exchange.

The two units made up 54 per cent of Brambles' sales in fiscal 2005 and 72 per cent of comparable operating profit.

- REUTERS