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Summary
- ASX-listed Brambles Limited continued to make noise among investors as curiosity peaked after the share price reached a 52-year high a few days back.
- Brambles is targeting a dividend payout ratio of about 45-60 per cent of underlying profit post deduction of tax and finance costs and tax.
The Australian Securities Exchange-listed Brambles Limited (ASX:BXB) continued to interest investors on 8 July, as curiosity around the share peaked after it reached a new 52-week high a couple of days back.
The shares were up 0.26 per cent on 8 July at 3:22 PM AEST and were trading at $11.53 with a market capitalisation of $16.59 billion.
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Brambles (ASX:BXB) dividend
The company has an annual dividend yield of 2.22 per cent. From interim dividend in FY20, the company moved on to a dividend policy based on payout ratio. It is aiming dividend payout ratio of about 45-60 per cent of underlying profit post deduction of tax and finance costs and tax.
For 2021, the company announced an interim dividend of 10 cents which was paid in April this year, following an announcement in March. The company paid a final dividend of 9 cents in 2020.
Brambles financial performance
For the first nine months of the fiscal year ended 30 June 2021, the company’s sales revenue was up 6 per cent at constant foreign exchange (FX) to $3,794.1 million. Brambles recorded a 3 per cent growth in volumes as higher demands in Australian RPCs businesses, and global pallets offset the declines seen in the automotive segment.
Revenue from sales from the company’s CHEP Americas subsidiary increased 7 per cent at constant FX rates primarily driven by high demand from existing North American customers, stockpiling of inventory in the US, and price realisation across the region.
For CHEP Asia-Pacific, revenue growth from sales saw an 8 per cent jump and constant FX because of the integration process of a big Australian RPC contract that was bagged in the second half of last year.
CHEP EMEA (Europe, Middle East and Africa) saw sales revenue grow by 4 per cent at a constant FX, which also included a 5 per cent volume growth seen in pallets driven by price realisation in the European markets. The growth in volume also indicated new customer base in Central and Eastern Europe, stockpiling because of Brexit and Covid-19, and increased demand from existing customers.
For FY21, it reiterated its guidance of growth of 4-6 per cent at constant FX in revenue from sales. Underlying profit margins are expected to improve, and US margins would see an increase of one percentage point. Underlying profit is expected to grow within 5 to 7 per cent at constant FX.
BXB Share price movement
Brambles’ share price recently extended its positive ride after the company made progressions towards a 5-year sustainability plan which was announced in October last year. The programme would prioritise regenerating its supply chains in order to decarbonise its purveyors, adjacent markets, and customers. In February this year, it merged Kegstar, its keg rental arm, with MicroStar, the US beer keg maker.
The share price of the company had seen an extended run into the green, which began on January 1, when Brambles’ shares posted an 8.73 per cent return, which was up 5 per cent from the previous month. The shares have posted a 6.32 per cent 12-month return and managed to finish in the green by approximately 3 per cent above the last 5 trading sessions.
