2006-07-03 Brambles upbeat about asset sale (by John Lehmann)

PALLETS giant Brambles Industries said yesterday it would soon finalise the sale of the British division of waste management business Cleanaway.

Brambles issued a positive outlook for earnings in 2005-06, predicting its pallet business Chep would record strong profit growth, with American sales up 10 per cent on last year.

"Chep is performing well in all regions and, in particular, Chep Americas has continued the very strong performance achieved in the first half of 2006. In the USA, Chep continues to benefit from significant operational efficiencies and increased market penetration."

Chep Latin American sales for the year were expected to jump 25 per cent from last year. European sales were likely to grow by 5 per cent.

Chep, Brambles's biggest division, posted a 27 per cent profit increase in the first half of 2005-06.

Brambles chief executive David Turner has been selling less-profitable businesses since announcing last November the company would focus on its faster-growing businesses such as Chep and document storage provider Recall.

So far, the sell-off has totalled $US2.44 billion ($3.35 billion), with the estimated $US900 million sale of Cleanaway UK the main divestment left.

Brambles this month received $1.8 billion from US private equity group Kohlberg Kravis Roberts for Cleanaway Australia and New Zealand, and Industrial Services Australia.

The company reported a $US251.9 million net profit for the first half, up from $US196.5 million in the previous corresponding period.

Recall hadr worse-than-expected earnings in the 2005-06 first half, but improved in the second.

The company also said yesterday it was on track to complete the unification of its dual-listed structure at the end of November.