By David Winning 
 

SYDNEY--Brambles Ltd. (BXB.AU) said its annual earnings more than doubled following the sale of the IFCO business, but offered a cautious outlook amid an economic slowdown in major markets.

Brambles reported a net profit of US$1.47 billion for the 12 months through June, up from US$692.7 million a year ago. The company reported a US$945.7 million gain on the sale of its IFCO RPC business to Triton and a unit the Abu Dhabi Investment Authority, which completed at the end of May.

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

The IFCO sale was the centerpiece of a major business overhaul that followed a rare profit warning and hefty writedowns in the 2017 fiscal year. Other moves included the disposal of its North American recycled whitewood pallets business and sale of a stake in an oil-and-gas joint venture with Hoover Container Solutions.

Brambles said earlier it would return up to US$1.95 billion of sale proceeds to shareholders, mainly via a share buyback. On-market stock purchases were paused from late June when the company entered its blackout period, but are due to restart following Wednesday's annual result.

Brambles said its CHEP Americas unit faced cost challenges in fiscal 2019. Brambles has moved to pass on higher costs to customers through increased prices of its products, albeit with a time lag that could be as long as several months.

Brambles's annual underlying profit, a measure of continuing operations that strips out financing costs, tax and one-time items, was up 2% at US$803.7 million on a constant currency basis.

Annual revenue rose by 7% to US$4.6 billion after stripping out the impact of currency swings, in line with management's expectation for sales growth of mid-single digits through the cycle. Brambles has been driving growth by converting customers to pooled solutions and broadening its global footprint.

Still, Brambles forecast "sales revenue growth to be at the lower end of its mid-single digit growth objective" in fiscal 2020, reflecting the ongoing slowdown in global economies and the automotive industry.

It expects underlying profit growth to be in line with, or slightly above, revenue growth in the current fiscal year.

 

-Write to David Winning at david.winning@wsj.com

 

(END) Dow Jones Newswires

August 20, 2019 18:42 ET (22:42 GMT)

Copyright (c) 2019 Dow Jones & Company, Inc.
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