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Well BIL is bouncing around its lows and only speculation of it divesting some business have seen the SP recovering. Comments from anyone on:

 

Plus points:

1. The CHEP debacle is now behind them and seem that mgmt have processes in place to track and account for inventory.

2. If there is a broadbase economic recovery, most of their businesses (& SP) will benefit.

3. After the "collapse" of the SP over the last 1-2 years, its a recovery story.

 

Minus points:

1. Weaker US$ means exchange rate weakness

2. Mgmt have not proven they can manage the business from here.

 

 

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IN REPLY TO A POST BY atleast16, Fri 16/01/04 03:03pm   [READ POST]

Well BIL is bouncing around its lows and only speculation of it divesting some business have seen the SP recovering. Comments from anyone on:

Plus points:
1. The CHEP debacle is now behind them and seem that mgmt have processes in place to track and account for inventory.
2. If there is a broadbase economic recovery, most of their businesses (& SP) will benefit.
3. After the "collapse" of the SP over the last 1-2 years, its a recovery story.

Minus points:
1. Weaker US$ means exchange rate weakness
2. Mgmt have not proven they can manage the business from here.

Yes got nicely burnt with some BIL warrants in the past, missing my opportunity to exit when speculation again rose about a take-over by GE or Wesfarmers.

 

Your most prominent point "2. Mgmt have not proven they can manage the business from here."

 

Until the next report comes out and evidence of improved operating performance, I do not see anyone majorly interested in this stock.

 

Agree with all of your other points as being contributing factors to the share price, you have summed it up pretty well.

 

Some interesting facts (from Market Scan as @ 1.18pm Jan 16, 2004)

 

Price to asset backing 4.85 times

P/E 27.38 times (still priced as a growth stock, Industry PE avg 20 times, Mkt PE avg 32 times)

Div yield 3.75%

Payout ratio 102%???

PEG 0.9

Return on capital a meagre 6.45% (you can get more than that sticking your money in a term deposit)

Current Liabilities $1,708M

Current Assets $1,850M (well at least they can cover their immediate debts if they ever got called)

 

I would perhaps disagree with you slightly by saying that BIL appears to be in a new uptrend, however, there is no way to say how long this will last, but I would say that like you have stated as the world economy appears to be turning upwards. Investors would expect an upturn in BIL's business, revenue and hopefully profits. Of course the old adage of buy the rumor and sell the fact may be at play here with an expectation of good numbers already priced in and then a sell off when they are announced.

 

Good luck with it. Personally I might play an option strategy on this one closer to reporting time.

 

 

 

 

 

 

 

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IN REPLY TO A POST BY moneyman888, Fri 16/01/04 02:42pm   [READ POST]

Yes got nicely burnt with some BIL warrants in the past, missing my opportunity to exit when speculation again rose about a take-over by GE or Wesfarmers.

Your most prominent point "2. Mgmt have not proven they can manage the business from here."

Until the next report comes out and evidence of improved operating performance, I do not see anyone majorly interested in this stock.

Agree with all of your other points as being contributing factors to the share price, you have summed it up pretty well.

Some interesting facts (from Market Scan as @ 1.18pm Jan 16, 2004)

Price to asset backing 4.85 times
P/E 27.38 times (still priced as a growth stock, Industry PE avg 20 times, Mkt PE avg 32 times)
Div yield 3.75%
Payout ratio 102%???
PEG 0.9
Return on capital a meagre 6.45% (you can get more than that sticking your money in a term deposit)
Current Liabilities $1,708M
Current Assets $1,850M (well at least they can cover their immediate debts if they ever got called)

I would perhaps disagree with you slightly by saying that BIL appears to be in a new uptrend, however, there is no way to say how long this will last, but I would say that like you have stated as the world economy appears to be turning upwards. Investors would expect an upturn in BIL's business, revenue and hopefully profits. Of course the old adage of buy the rumor and sell the fact may be at play here with an expectation of good numbers already priced in and then a sell off when they are announced.

Good luck with it. Personally I might play an option strategy on this one closer to reporting time.

Hi al16

 

I've held BIL for about 9 months now, as a recovery play. I'm more confident about this current uptrend than others during that time, because I'm wondering whether we're starting to see renewed (cautious) institutional interest. Previous speculation has led to shorter, more volatile effects on the SP. It has traded within a very predictable support/resistance channel for ages, and I'm more confident daily that we've entered a new channel, with support now at around the $5 mark that was a resistance point for so long. Beware if it falls through there again...

 

On your minus points:

1. Certainly exchange rates are a factor, but bear in mind that its in uptrend while exchange rates are the least favourable they've been for years

 

2. The departure of Sir CK Chow is a major management shift that seems to have had a positive effect on the market...it's still a relatively recent change. Like moneyman I'll be watching the play in the leadup to the next report with interest, but basically I'm in for the medium/long haul with this one.

 

Mrs B

 

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  • 4 months later...

BIL ÃÆâ€â„¢ÃƒÆ’ƒâہ¡ÃƒÆ’‚¢ÃƒÆ’¢Ã¢Ã¢Ã¢Ã¢â€š¬Ã…¡Ãƒâ€šÃ‚¬ÃƒÆ’…¡Ãƒâہ¡ÃƒÆ’‚¬ÃƒÆ’¢Ã¢Ã¢Ã¢Ã¢â‚¬Å¡Ã‚¬Ãƒâ€¦Ã‚¡ÃƒÆ’‚¬Ãƒâ€Â¦ÃƒÆ’¢Ã¢Ã¢â‚¬Å¡Ã‚¬Ãƒâ€¦Ã¢â‚¬Å“ Trading the Trading Update

Brambles is due to deliver its trading update on Wed 26th May 2004 at 8.30am AST. We expect it will cover all of its core businesses (CHEP, Cleanaway, Recall and Industrial Services) and be quite positive.

 

While specific numbers for the 10 mths to April are unlikely to be given, we do expect Brambles will try and make it clear that it expects a sharp rebound in H2 profitability and for an even better FY05E.

 

We continue to believe the two key highlights of the update will be: (1) CHEP USAÃÆâ€â„¢ÃƒÆ’ƒâہ¡ÃƒÆ’‚¢ÃƒÆ’¢Ã¢Ã¢Ã¢Ã¢â€š¬Ã…¡Ãƒâ€šÃ‚¬ÃƒÆ’…¡Ãƒâہ¡ÃƒÆ’‚¬ÃƒÆ’¢Ã¢Ã¢Ã¢Ã¢â€š¬Ã…¡Ãƒâ€šÃ‚¬ÃƒÆ’…¾Ãƒâہ¡ÃƒÆ’‚¢s significant improvement in H2 EBITA margins and (2) Cleanaway UKÃÆâ€â„¢ÃƒÆ’ƒâہ¡ÃƒÆ’‚¢ÃƒÆ’¢Ã¢Ã¢Ã¢Ã¢â€š¬Ã…¡Ãƒâ€šÃ‚¬ÃƒÆ’…¡Ãƒâہ¡ÃƒÆ’‚¬ÃƒÆ’¢Ã¢Ã¢Ã¢Ã¢â€š¬Ã…¡Ãƒâ€šÃ‚¬ÃƒÆ’…¾Ãƒâہ¡ÃƒÆ’‚¢s lift in EBITA (new contracts and rationalization).

 

We believe CHEP USA is on track to lift EBITA margins from 8.5% in 1HFY04 to around 11% in 2HFY04 on sales growth of 8-10% (constant currency) and that $27m of costs in 1HFY04 were actually ÃÆâ€â„¢ÃƒÆ’ƒâہ¡ÃƒÆ’‚¢ÃƒÆ’¢Ã¢Ã¢Ã¢Ã¢â€š¬Ã…¡Ãƒâ€šÃ‚¬ÃƒÆ’…¡Ãƒâہ¡ÃƒÆ’‚¬ÃƒÆ’â€Â¦ÃƒƒÂ¢Ãƒ¢Ã¢Ã¢â€š¬Ã…¡Ãƒâ€šÃ‚¬ÃƒÆ’…âہ“oneoffsÃÆâ€â„¢ÃƒÆ’ƒâہ¡ÃƒÆ’‚¢ÃƒÆ’¢Ã¢Ã¢Ã¢Ã¢â€š¬Ã…¡Ãƒâ€šÃ‚¬ÃƒÆ’…¡Ãƒâہ¡ÃƒÆ’‚¬ÃƒÆ’â€Å¡Ãƒƒâہ¡ÃƒÆ’‚ÂÂ.

 

The only areas we believe that may disappoint are Recall Europe and Interlake US. Iron Mountain revealed European trading difficulties in its recent 1Q result; we expect Recall had similar issues.

 

Encouragingly, the lower A$, the 20-40% price rises CHEP Europe is currently levying on some of its fast moving consumer goods customers (like Heinz, Kellogg and Unilever) along with the potential for good news at the trading update should result in FY05E upgrades.

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  • 1 month later...

{CLV 00007579}

Brambles streamlines CHEP organisation

Full year outlook reaffirmed

Brambles today announced changes in the organisational structure of its pallet and

container pooling business, CHEP, to streamline business processes.

A key component is the creation of two regional groups for CHEP, each reporting

directly to BramblesÃÆâ€â„¢ÃƒÆ’ƒâ€Â ÃƒÆ’¢Ã¢Ã¢â‚¬Å¡Ã‚¬Ãƒ¢Ã¢â‚¬Å¾Ã‚¢ÃƒÆ’ƒÆ’â€Å¡Ãƒƒâہ¡ÃƒÆ’‚¢ÃƒÆ’Æâ€â„¢ÃƒÆ’ƒâہ¡ÃƒÆ’‚¢ÃƒÆ’¢Ã¢Ã¢Ã¢Ã¢â‚¬Å¡Ã‚¬Ãƒâ€¦Ã‚¡ÃƒÆ’‚¬Ãƒâ€Â¦ÃƒÆ’‚¡ÃƒÆ’â€Å¡Ãƒƒâہ¡ÃƒÆ’‚¬ÃƒÆ’Æâ€â„¢ÃƒÆ’ƒâہ¡ÃƒÆ’‚¢ÃƒÆ’¢Ã¢Ã¢Ã¢Ã¢â‚¬Å¡Ã‚¬Ãƒâ€¦Ã‚¡ÃƒÆ’‚¬Ãƒâ€Â¦ÃƒÆ’‚¾ÃƒÆ’â€Å¡Ãƒƒâہ¡ÃƒÆ’‚¢ Chief Executive Officer, David Turner. They are:

CHEP Europe, comprising the operations in Europe, Africa and Asia-Pacific; and

CHEP Americas, comprising the operations in North and South America.

Mark Luby, who is successfully leading the restructuring of CHEP Europe, will become

President of the combined CHEP Europe, Africa and Asia-Pacific organisation. David

Mezzanotte, who has successfully led the turnaround in CHEP USA, will become

President of CHEP Americas.

Both Mark and David will join the Brambles Executive Committee.

The CHEP global management structure will be eliminated, although certain key

functions such as IS, Marketing, Product Development and Operations will continue to

be managed globally under the new structure, reporting to Mark and David. Victor

Mendes, CEO of CHEP, will complete the transition of his executive responsibilities on

30 June 2004 but will be available for a further three months to consult with the Board,

as required.

David Turner said, ÃÆâ€â„¢ÃƒÆ’ƒâ€Â ÃƒÆ’¢Ã¢Ã¢â‚¬Å¡Ã‚¬Ãƒ¢Ã¢â‚¬Å¾Ã‚¢ÃƒÆ’ƒÆ’â€Å¡Ãƒƒâہ¡ÃƒÆ’‚¢ÃƒÆ’Æâ€â„¢ÃƒÆ’ƒâہ¡ÃƒÆ’‚¢ÃƒÆ’¢Ã¢Ã¢Ã¢Ã¢â‚¬Å¡Ã‚¬Ãƒâ€¦Ã‚¡ÃƒÆ’‚¬Ãƒâ€Â¦ÃƒÆ’‚¡ÃƒÆ’â€Å¡Ãƒƒâہ¡ÃƒÆ’‚¬ÃƒÆ’Æâ€â„¢ÃƒÆ’ƒÂ¢Ãƒ¢Ã¢Ã¢â€š¬Ã…¡Ãƒâ€šÃ‚¬ÃƒÆ’‚¦ÃƒÆ’¢Ã¢Ã¢Ã¢Ã¢â‚¬Å¡Ã‚¬Ãƒâ€¦Ã‚¡ÃƒÆ’‚¬Ãƒâ€Â¦ÃƒÆ’¢Ã¢Ã¢â‚¬Å¡Ã‚¬Ãƒâ€¦Ã¢â‚¬Å“The work that Victor and the team have done to refocus CHEP on

its core competencies and the fundamental drivers of growth means the business is

now in a stronger position to deliver sustainable growth and sound returns for

shareholders. Victor has contributed significantly to CHEP in a period of very positive

change and is leaving the group with our very best wishes.

ÃÆâ€â„¢ÃƒÆ’ƒâ€Â ÃƒÆ’¢Ã¢Ã¢â‚¬Å¡Ã‚¬Ãƒ¢Ã¢â‚¬Å¾Ã‚¢ÃƒÆ’ƒÆ’â€Å¡Ãƒƒâہ¡ÃƒÆ’‚¢ÃƒÆ’Æâ€â„¢ÃƒÆ’ƒâہ¡ÃƒÆ’‚¢ÃƒÆ’¢Ã¢Ã¢Ã¢Ã¢â‚¬Å¡Ã‚¬Ãƒâ€¦Ã‚¡ÃƒÆ’‚¬Ãƒâ€Â¦ÃƒÆ’‚¡ÃƒÆ’â€Å¡Ãƒƒâہ¡ÃƒÆ’‚¬ÃƒÆ’Æâ€â„¢ÃƒÆ’ƒÂ¢Ãƒ¢Ã¢Ã¢â€š¬Ã…¡Ãƒâ€šÃ‚¬ÃƒÆ’‚¦ÃƒÆ’¢Ã¢Ã¢Ã¢Ã¢â‚¬Å¡Ã‚¬Ãƒâ€¦Ã‚¡ÃƒÆ’‚¬Ãƒâ€Â¦ÃƒÆ’¢Ã¢Ã¢â‚¬Å¡Ã‚¬Ãƒâ€¦Ã¢â‚¬Å“The reorganisation of CHEP will result in increased regional accountability and

operational efficiency, and reflects BramblesÃÆâ€â„¢ÃƒÆ’ƒâ€Â ÃƒÆ’¢Ã¢Ã¢â‚¬Å¡Ã‚¬Ãƒ¢Ã¢â‚¬Å¾Ã‚¢ÃƒÆ’ƒÆ’â€Å¡Ãƒƒâہ¡ÃƒÆ’‚¢ÃƒÆ’Æâ€â„¢ÃƒÆ’ƒâہ¡ÃƒÆ’‚¢ÃƒÆ’¢Ã¢Ã¢Ã¢Ã¢â‚¬Å¡Ã‚¬Ãƒâ€¦Ã‚¡ÃƒÆ’‚¬Ãƒâ€Â¦ÃƒÆ’‚¡ÃƒÆ’â€Å¡Ãƒƒâہ¡ÃƒÆ’‚¬ÃƒÆ’Æâ€â„¢ÃƒÆ’ƒâہ¡ÃƒÆ’‚¢ÃƒÆ’¢Ã¢Ã¢Ã¢Ã¢â‚¬Å¡Ã‚¬Ãƒâ€¦Ã‚¡ÃƒÆ’‚¬Ãƒâ€Â¦ÃƒÆ’‚¾ÃƒÆ’â€Å¡Ãƒƒâہ¡ÃƒÆ’‚¢ continuing focus on operating with the

most cost-effective organisation.ÃÆâ€â„¢ÃƒÆ’ƒâ€Â ÃƒÆ’¢Ã¢Ã¢â‚¬Å¡Ã‚¬Ãƒ¢Ã¢â‚¬Å¾Ã‚¢ÃƒÆ’ƒÆ’â€Å¡Ãƒƒâہ¡ÃƒÆ’‚¢ÃƒÆ’Æâ€â„¢ÃƒÆ’ƒâہ¡ÃƒÆ’‚¢ÃƒÆ’¢Ã¢Ã¢Ã¢Ã¢â‚¬Å¡Ã‚¬Ãƒâ€¦Ã‚¡ÃƒÆ’‚¬Ãƒâ€Â¦ÃƒÆ’‚¡ÃƒÆ’â€Å¡Ãƒƒâہ¡ÃƒÆ’‚¬ÃƒÆ’Æâ€â„¢ÃƒÆ’ƒÂ¢Ãƒ¢Ã¢Ã¢â€š¬Ã…¡Ãƒâ€šÃ‚¬ÃƒÆ’…¡ÃƒÆ’â€Å¡Ãƒƒâہ¡ÃƒÆ’‚ÂÂ

The pre-tax cost of the reorganisation is estimated to be ÃÆâ€â„¢ÃƒÆ’ƒâ€Â ÃƒÆ’¢Ã¢Ã¢â‚¬Å¡Ã‚¬Ãƒ¢Ã¢â‚¬Å¾Ã‚¢ÃƒÆ’ƒÆ’¢Ã¢Ã¢Ã¢Ã¢â‚¬Å¡Ã‚¬Ãƒâ€¦Ã‚¡ÃƒÆ’‚¬Ãƒâ€Â¦ÃƒÆ’‚¡ÃƒÆ’Æâ€â„¢ÃƒÆ’ƒÂ¢Ãƒ¢Ã¢Ã¢â€š¬Ã…¡Ãƒâ€šÃ‚¬ÃƒÆ’…¡ÃƒÆ’â€Å¡Ãƒƒâہ¡ÃƒÆ’‚£6 million / A$15 million, and

will be included as an operating exceptional item under UK GAAP and as a significant

item under Australian GAAP in the accounts to 30 June 2004. The reorganisation is

expected to result in a pre-tax benefit at least equal to the cost of the reorganisation

within 12 months.

Brambles reaffirms its full year outlook, as announced in its 26 May 2004 trading

update. In that update, Brambles confirmed that CHEP is expected to deliver strong

growth in profit in the second half of 2004 (compared with both the first half of 2004

and the second half of 2003) due to good performance in all regions. BramblesÃÆâ€â„¢ÃƒÆ’ƒâ€Â ÃƒÆ’¢Ã¢Ã¢â‚¬Å¡Ã‚¬Ãƒ¢Ã¢â‚¬Å¾Ã‚¢ÃƒÆ’ƒÆ’â€Å¡Ãƒƒâہ¡ÃƒÆ’‚¢ÃƒÆ’Æâ€â„¢ÃƒÆ’ƒâہ¡ÃƒÆ’‚¢ÃƒÆ’¢Ã¢Ã¢Ã¢Ã¢â‚¬Å¡Ã‚¬Ãƒâ€¦Ã‚¡ÃƒÆ’‚¬Ãƒâ€Â¦ÃƒÆ’‚¡ÃƒÆ’â€Å¡Ãƒƒâہ¡ÃƒÆ’‚¬ÃƒÆ’Æâ€â„¢ÃƒÆ’ƒâہ¡ÃƒÆ’‚¢ÃƒÆ’¢Ã¢Ã¢Ã¢Ã¢â‚¬Å¡Ã‚¬Ãƒâ€¦Ã‚¡ÃƒÆ’‚¬Ãƒâ€Â¦ÃƒÆ’‚¾ÃƒÆ’â€Å¡Ãƒƒâہ¡ÃƒÆ’‚¢ outlook

for the year ended 30 June 2004 remains unchanged from the Interim Results

statement on 25 February

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  • 4 weeks later...

Quotes:

 

QUOTE
I would estimate net profit to be around 400 mil with Divs at 20c - it will really depend on US recovery and all the current guidance is that the US is well back on track and now Europe having reneg contracts up over 40% the next broker / market review of BIl will see a major upside - which i am calling a $7.50 end of year target.

 

QUOTE
Many brokers now confident of dramatic reversal in 2nd half of 04.
Is BIL set for a new run ????
any chartists have views ?
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Chart - BIL is on lower trend line, could reverse up to the top of the channel again, so important position at moment, if drops down further in big trouble, thus hope the report is good for all holders...

 

Could be a good buying point, with a stop?

 

 

 

post-16-1090380709.gif

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I got into this for my blue chip portfolio shortly after posting my thoughts on BIL early this year. So am happy with where it is now. I am still optimistic about its prospects for the next 6 months so I will still hold. It is a recovery stock and if their next report confirms that all reorg is bedded down nicely and performing, it can easily add another 10%.
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Looks like starting to head north...

 

 

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