Brambles Shares Hit Record High on Capital-Management Moves

By Stuart Condie

SYDNEY--Brambles shares hit a record high after the global pallet giant announced a US$500 million share buyback and increased its dividend payout ratio to reflect structural improvement in its free cashflow.

Brambles on Wednesday reported a 77% rise in annual free cashflow and a drop in debt to 1.12 times earnings as at June 30, from 1.31 a year earlier. Calling the improvements structural, Brambles said it would increase its dividend payout ratio in fiscal 2025 to 50-70% of underlying profit, from 45-60%.

The stock jumped 12% in early trade on Wednesday to an intraday record of 17.51 Australian dollars (US$11.82). It was recently up 8.5% at A$17.00.

The initiatives will see Brambles return about A$1.0 billion in additional capital to shareholders, RBC Capital Markets analyst Owen Birrell said.

Brambles has invested heavily in improving asset efficiency, including rolling out tracking devices to help identify supply-chain pinch points and areas with elevated pallet losses.

"Our achievements reflect the progress of our transformation program, which has improved the fundamentals of our business," Brambles Chief Executive Graham Chipchase said.

Write to Stuart Condie at stuart.condie@wsj.com

(END) Dow Jones Newswires

August 20, 2024 20:55 ET (00:55 GMT)

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