Brambles shares jump on solid earnings
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More news: Shares in Brambles jumped 7.5% to $16.85 by 11:34am AEST, after delivering a solid FY24 result.
Both RBC Capital and Jarden analysts said its earnings came in ahead of guidance.
Jarden had an ‘overweight’ rating on the stock with a price target of $15.90 while RBC had an ‘outperform’ rating with a price target of $17.50.
The logistics company reported an underlying NPAT of US$780 million ($1.16 billion) which was 4.6% ahead of consensus and hiked its dividend by 30%.
Brambles tops full-year guidance, hikes dividend 30%
The news: Logistics group Brambles topped its full-year guidance and lifted its dividend, and unveiled plans for a USD500 million ($741 million) share buyback in FY25.
The numbers: Brambles reported underlying net profit after tax of USD780 million, 4.6% ahead of consensus estimates. Revenue grew 7% year on year to USD6.55 billion, in line with average forecasts of USD6.57 billion.
Elsewhere underlying EBIT of USD1.26 billion was 2% above consensus, with core earnings per share 5% ahead of average estimates. Brambles declared a total dividend of 34 cents per share, up 30% on FY23 and 15% ahead of consensus.
Brambles also announced two capital management initiatives, comprising a lift to its future dividend payout ratio range from 45% to 60% to 50% to 70%, and an on-market share buyback in FY25 of up to USD500 million, subject to market conditions.
FY25 guidance of 4% to 6% revenue growth and 8% to 11% underlying profit growth were 3.9% and 7.4% above consensus respectively.
The context: Brambles said that revenue growth during the year was driven by price and included current year price realisation and the benefit of actions taken in FY23 to recover higher inflation and other cost-to-serve pressures.
The company noted the operating environment in FY24 was characterised by inventory optimisation across retailer and manufacturer supply chains in Europe and North America, weak consumer demand in all regions and moderating inflationary pressures.
While the overall rate of input-cost inflation moderated from record levels in prior years, Brambles said it continued to experience labour rate increases in all regions and higher transport rates in Europe. These pressures were partly offset by lower transport rates in North America and deflation across fuel and lumber in all regions.
The sources: ASX announcement, Jarden research
