BXB soared +9.25% on Wednesday, hitting all-time highs after the global pallet giant announced a $US500mn share buyback and lifted its dividend payout ratio to reflect the company’s improved cash flow – BXB reported a 77% rise in annual free cash flow. Brambles has invested heavily in improving asset efficiency and rolling out tracking devices to identify bottlenecks, an initiative that is paying dividends.
- Revenue increased 7% yoy to $US6.55mn which was in-line.
- They expect underlying profit to grow 8-11% in FY25, ahead of estimates of ~+7.2%.
- Operating profit after tax up 17% to $US779.9mn, ~4.7% ahead of estimates.
- BXB raised its dividend to $US0.19 from $US0.14c plus they announced the significant buyback.
- They expect FY25 free cash flow before dividends of $US750mn-$US800mn.
This is an excellent result by BXB, and a positive read through more broadly for global economic trends i.e. this is not the sort of result that would be delivered if economy was particularly weak, though it’s hard to justify chasing the stock above $17.
MM is cautiously bullish on BXB
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