This ASX 200 share is leaping 8% on bumper profits and a boosted dividend

The pallets, crates, and containers company reported a 9% increase in profit.

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a man sits back from his laptop computer with both hands behind his head feeling happy to see the Brambles share price moving significantly higher today

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Key points

  • The Brambles share price is up by more than 8% after the company released its 1H FY23 report
  • Profits after tax are up 9% and the interim dividend has been boosted by 14% 
  • The ASX 200 share has vastly outperformed the broader market, with Brambles shares up by 31% compared to a 4.5% bump for the index

ASX 200 shares are up a collective 0.37% today, with Brambles Limited (ASX: BXB) a shining outlier after the company released its 1H FY23 report.

Shares in the pallets, crates, and containers provider opened at $12.52, up 3.7% on yesterday's close. The stock then gradually rose to an intraday high of $13.10, up 8.5%. The ASX 200 share is currently trading for $13.08, up 8.4%.

Let's look into the detail of the company's report.

ASX 200 share soars on big profit rise

Here are the highlights of 1H FY23 for Brambles:

  • Sales revenue from continuing operations of US$2,931.5 million, up 7% on the prior corresponding period (pcp) of 1H FY22
  • Underlying profit and operating profit from continuing operations of US$548.8 million, up 14% pcp
  • Profit after tax US$331.1 million, up 9% pcp
  • Basic earnings per share (EPS) from continuing operations up 13% pcp to 24.1 US cents
  • Cash flow from operations of US$140.4 million
  • 35% franked interim dividend of 12.25 US cents payable on 13 April.

The dividend represents a 14% bump on the ASX 200 share's last interim dividend of 10.75 US cents.

The EPS boost reflects earnings growth and the impact of the share buyback completed in June 2022.

What did management say?

Brambles CEO, Graham Chipchase commented:

This is an outstanding result for Brambles, with the business delivering strong revenue and profit growth with operating leverage despite the challenging external environment and ongoing inflationary pressures.

This performance reinforces the defensive nature of our business and highlights the critical role our pooled solutions play in supply chains today.

Chipchase said the company's performance "demonstrates our ongoing financial discipline, including recovery of cost-to-serve increases, and delivery of benefits from the transformation programme".

What's next?

Brambles has upgraded its full-year guidance for revenue growth to between 12% and 14%. It also expects underlying profit growth of between 15% and 18%.

Brambles also announced the retirement of its chief financial officer (CFO), Nessa O'Sullivan today. O'Sullivan will step down as CFO and an executive director in the first quarter of the 2024 calendar year.

Recent history of this ASX 200 share

Over the past 12 months, the Brambles share price has increased by 31%.

The ASX 200 share has vastly outperformed the broader market, with the S&P/ASX 200 Index (ASX: XJO) up by 4.5%.

Motley Fool contributor Bronwyn Allen has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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