Brambles Profit Rises, to Spin off IFCO RPC Unit

   By David Winning 
 

SYDNEY--Logistics company Brambles Ltd. (BXB.AU) reported a sharp rise in annual profit and said it will spin off or sell a business that supplies crates for moving fresh produce to retailers in Europe, Asia and the Americas.

Brambles reported a net profit of US$747.1 million for the 12 months through June, up from US$182.9 million a year ago. The result included a US$127.9 million benefit resulting from the U.S. tax reform while US$120 million in impairment charges that weighed on its result a year ago weren't repeated.

Directors of the company declared a final dividend of 14.5 Australian cents a share, in line with the payout a year earlier.

Brambles said it has decided to spin off its IFCO RPC business, following on from February's sale of its North American recycled whitewood pallets business to a Colorado-based private equity firm for US$115 million including debt and subsequent sale of a stake in an oil-and-gas joint venture with Hoover Container Solutions.

"Although both CHEP and IFCO operate pooling models, they are distinct businesses with different financial profiles and customer propositions," Brambles said. "There is no meaningful operational overlap or customer-related synergies between CHEP and IFCO that would be lost as a result of a separation."

Brambles said it will also consider whether a sale of IFCO would be a better outcome for shareholders than a demerger.

As part of the separation, Brambles said it would "also undertake an evaluation of its capital structure to ensure it is optimal for supporting future growth and shareholder returns while still maintaining a strong balance sheet and credit profile."

-Write to David Winning at [e-mail]

(END) Dow Jones Newswires

August 23, 2018 18:41 ET (22:41 GMT)

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