Brambles' profit up 74pc for second half

SYDNEY - Brambles Industries, whose Chep unit is the world's biggest supplier of pallets used to move and store goods, posted a 74 per cent gain in second-half profit as it increased prices in Europe.

Net income rose to A$294 million ($317.87 million) for the six months ended June 30 from A$168.6 million a year earlier. It was the company's fourth consecutive half of earnings growth since costs to reorganise its Chep business in Europe caused earnings to slump.

Chief executive David Turner has made Chep the company's most profitable unit since taking charge two years ago, a turnaround for the business which took a one-time charge in 2003 to retrieve millions of lost pallets in Europe.

Turner said yesterday Brambles was performing well so far this year and would probably boost earnings.

Atul Lele, at White Funds in Sydney, said the outlook was "particularly positive, especially with regards to cash generation from Chep ... We're really seeing the benefits flow through to the bottom line."

Second-half profit, a record for a six-month period, was calculated by subtracting the first-half from Sydney-based Brambles' A$528 million full-year net income.

Turner said Chep had had an excellent year and Brambles expected more good progress in profit.

Chep's second-half sales rose 5.3 per cent to A$1.8 billion bolstered by earnings in the United States and pricing gains in Europe. All regions improved their profitability.

Waste management unit Cleanaway increased sales by 3.6 per cent on improved performance in Britain. Recall, a document storage business, had a 5.6 per cent increase in sales.

- BLOOMBERG