The world's biggest supplier of industrial pallets reported a 29 per cent increase in underlying profits yesterday as it prepared for the £595 million sale of a major UK business.
Anglo-Australian company Brambles - spun out of Redditch-based GKN in 2001 - described trading at its CHEP pallets business as "very strong", while the 12 months to the end of June also saw a strong improvement for its UK-based Cleanaway waste management arm.
Brambles announced the sale of the UK rubbish collection operation in June after striking a deal with with the French owner of rival Onyx.
The sale of the division is one of a number of disposals by Brambles, although the UK arm still featured in the latest annual results, which showed operating profits of £407.9 million compared with £317.2 million a year earlier.
A decision from competition authorities on the proposed sale of Cleanaway UK is expected in the next two months.
Management initiatives ensured the division boosted underlying profits by 104 per cent to £42.9 million while revenues increased by five per cent to £483.7 million.
As well as being one of the largest collectors of municipal, commercial and industrial waste, Cleanaway UK provides ground maintenance and landscaping to more than 50 customers, including Regent's Park and Hyde Park in London.
It operates four landfill sites and has a network of waste processing plants including one at Rainham, Essex.
Cleanaway's other branches in Australia, New Zealand and Germany have already been sold as part of a plan by Brambles to concentrate on its CHEP pallets and Recall document management businesses.
The divestment programme is largely complete and has g enerated proceeds of £1.9 billion, Brambles said.
The group leases 200 million pallets around the world and employs 28,000 people in 50 countries.
CHEP sales were seven per cent higher at £1.59 billion in the financial year, while comparable operating profits improved by 32 per cent to £372.3 million.
Much of the improvement reflected a strong performance in the Americas, while CHEP's European arm benefited from restructuring and pricing initiatives aimed at aligning customer use of pallets and their cost to serve.
Sales in CHEP Europe were six per cent higher at £661.1 million with profits up a fifth to £139.4 million.
Brambles added: "Recent customer satisfaction surveys have shown a strong improvement in two key markets - UK and France.
"There is still more to do on customer satisfaction but these early indications are encouraging and further progress is expected over the next two years."
Andrew Fisher, head of equity research at Barclays Stockbrokers, said the figures were slightly better than the market had been anticipating.
He added: "Trading remains positive, with guidance given by the company for 2007 at the top end of market expectations."
Brambles' Australian shares closed yesterday 6.1 per cent up at Aus$11.5 and the London-traded stock also put on a spurt to reach 455p at one stage before settling back at 44714p, a rise of 2014p or five per cent.
"The numbers are clearly better than the market expected and that's what is driving the share price," UBS analyst Mark Shepperd said.