Brambles Ltd. (BXB.AU) highlighted fresh progress in the turnaround of its U.S. pallets business after a profit warning earlier this year triggered a steep fall in its share price.
Brambles said sales revenue in U.S. pallets rose by 4% in the three months through September, mainly driven by strong net new business growth associated with customer contract wins.
That contributed to the company's global sales revenue rising by 6% to US$1.374 billion in its fiscal first quarter, after stripping out the impact of currency swings. Brambles said it also benefited from strong volume growth in its European pallets business.
Brambles shares have lost nearly a quarter of their value over the past year as management missteps rocked confidence in what had previously been one of the Australian Securities Exchange's steadiest performers. In late January, the company issued a rare profit warning just weeks before Graham Chipchase replaced Tom Gorman as chief executive.
Many of its recent problems have their roots in North America where the company struggled to convert pallets customers to pooling and it wasn't able to lift prices significantly. In addition, customer destocking hit volume growth.
On Wednesday, Mr. Chipchase said it was pleasing "to see the momentum established in our U.S. pallets business during the last quarter of FY17 continue into the first quarter."
Global sales were in line with management expectations for mid-single digit revenue growth through the cycle, he said.
Still, Mr. Chipchase warned that Brambles continued to face cost headwinds, especially in the U.S. pallets business.
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(END) Dow Jones Newswires
October 17, 2017 18:02 ET (22:02 GMT)