Pallets provider Brambles Ltd (ASX: BXB) shares hit a record high of $17.51 this morning after the company released strong FY24 numbers.
Let's jump right in to see what this ASX 100 Industrial company reported today.
Robust FY24 results and share buybacks announced
The key financial highlights from the FY24 report are as follows. It should be noted that year-on-year comparisons are based on continuing operations only.
- Revenue increased by 7% from a year ago to US$6.55 billion.
- Underlying profit surged 18% to US$1.26 billion.
- Operating profit after tax for continuing operations increased by 19% to US$779.9 million.
- Basic earnings-per-share (EPS) for continuing operations increased by 19% to US 56.1 cents.
- The final dividend per share of US 19 cents was declared, bringing the FY24 total dividends to US 34 cents per share.
The company's cash flow from operations surged by US$529.3 million from a year ago to US$1.32 billion in FY24, leading to a free cash flow of US$882.8 million.
Brambles' financial performance highlights strong free cash flow generation, driven by operating leverage and enhanced asset efficiency resulting from its "Shaping Our Future" transformation initiatives.
These initiatives have significantly contributed to asset efficiency improvements, while retailers and manufacturers continued to reduce their pallet balances as part of 'inventory optimisation' efforts.
The company highlighted that Bramble's ongoing efforts in asset efficiency helped improve pallet cycle times and loss rates for its customers.
The company's 7% revenue growth was also driven by price realisation efforts aimed at recovering costs. Volumes remained stable compared to FY23. Management expects the volume growth will continue into FY25.
On the back of strong results, the company announced share repurchases of up to US$ 500 million.
Brambles increased its target dividend payout ratio range from 45% and 60% to 50% and 70%.
What did management say?
Commenting on the solid FY24 results, Brambles CEO Graham Chipchase highlighted the company's improved customer experience and operational efficiency. He said:
We are proud of what we have achieved this year with marked improvements to the customer experience in all regions, the reinforcement of our leading sustainability credentials and financial outcomes that delivered on our investor value proposition.
Our profit and cash flow performance were ahead of guidance despite incremental costs associated with additional pallet returns as retailers and manufacturers largely completed inventory optimisation initiatives in North America and Europe.
This resilience reflects the investments we have made to increase the capacity and agility of our networkthrough automation, as well as structural reductions in the capital intensity of our business linked to our sustained focus on asset efficiency and broader improvements in supply chain dynamics.
Strong momentum to continue in FY25
Looking at FY25, Brambles provided the following guidance.
- Revenue growth of 4% to 6%,
- Underlying profit growth of 8% to 11%
- Free cash flow before dividends of US$750 million to US$850 million.
On the FY25 outlook, Chipchase added:
Our FY25 financial outlook delivers our investor value proposition. It reflects our ongoing focus on commercial discipline, pursuing new business growth in key markets and delivering further efficiencies through our transformation programme.
Share price movement
The Brambles share price has surged more than 8% to $16.94 at the time of writing and is trading 20% higher over the past year.
