Stock to watch

All eyes on BIL this morning -
Good luck to those invested.
The puts could see some pressure today imo., but then on the other hand I don't underestimate the 'power' of MM's. weshallsee.


Stock to Watch: BRAMBLES INDUSTRIES
09:34, Thursday, 20 June 2002

Sydney - Thursday - June 20: (RWE)
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BRAMBLES SHARES SET TO RALLY AFTER
UPDATE QUELLS DOWNGRADE FEARS
Overview
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Shares in Brambles Industries Ltd (BIL) look set for a rally
today after its UK-listed shares gained 4.4 per cent in London overnight
following the release of a long-awaited trading update.
The world's largest provider of storage pallets took a weight of
investors' shoulders, saying it should report "progress" in its fiscal
second half.
"The group overall is continuing to perform in line with our
expectations in late February this year," the statement said.
Restructuring of its US-based CHEP pallet rental unit had "begun
to yield results" while revenue growth at CHEP and Cleanaway had
continued, the company said.
The news was welcomed by shareholders in the UK overnight and is
expected to see the company's shares recover some of the losses they
incured recently on investor fears of a possible profit downgrade.
Brambles closed down 2.9 per cent to $8.60 yesterday on the
Australian Stock Exchange on volume of 6.7 million as skittish investors
bailed out of the stock.
Sellers were concerned about the company's US-based CHEP pallet
business, believing it could take longer than expected to restore the
strong profit margins it generated during the late 1990s.
But Brambles said CHEP's overall performance in the US and
Europe had stabilised over the past five months and forecast business
would improve in 2002/03.
Details
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Last price: $8.60
High/Low for year: $11.80/$8.42
P/E ratio: 23.62
Dividend yield: 3.08 per cent
Background
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Brambles Industries Ltd's (BIL) core business is materials
handling and industrial and equipment services in Australia, NZ, North
America and Europe.
The company reported a drop in earnings per share before
significant items for the half to end-December.
Brambles' CHEP pallet business posted a weaker result before
tax, interest and amortisation on the back of higher depreciation,
information technology and other costs.
While the company's Cleanaway business posted a lift in
underlying performance, operating margins shrank to 10.6 per cent from
12.5 per cent.
The standout performer was Brambles's Recall operation, which
delivered a 63 per cent jump in operating profits and higher margins.
Brambles is focused on organic growth and improving the
efficiency of its CHEP business.
The company has forecast an improvement in its CHEP business in
2002/03 thanks to operational cost efficiencies.
Brambles merged with British engineering group GKN last year,
creating a global support services group.