Australian Investment Blog

24/08/2018

Brambles a beat

Stock

Brambles (ASX:BXB) $10.59 as at 24/08/2018

Event

The global logistics company posted a bumper FY18 result pre-market today which has seen the stock trade up strongly through the morning. The result was 2.5% beat at the profit line on the back of a decent top line (revenue) number. BXB has had a volatile 12 months however the trends in the business now look reasonable with price increases in the CHEP America’s operation helping the cause. Today they outlined their intention to spin out Ifco, which is a fresh food logistics business that does about $1.1bn in revenue and accounts for roughly 14% of the companies EBIT. ASX:BXB financial result

ASX:BXB guided to mid-single digit top line growth in the business from the continued operations and that was inline with current market expectations which had 5.3% revenue growth in constant currency terms penciled in. The main variable for BXB stems from rising cost pressures which is becoming a common theme during this reporting season. Brambles (BXB) Chart ASX:BXB chart

Market Matters Take/Outlook

A good result from BXB and the company is gaining momentum after a reasonably difficult period. We don’t own BXB, and are unlikely to buy it here, however a solid US focused industrial non-the-less.

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