03/01/06 Latest Brambles sale nets $3 (By Scott Rochfort)

BRAMBLES Industries has sold off another chunk of its "non-core" operations, fetching £133 million ($316 million) for its northern hemisphere Industrial Services arm.

Brambles announced on Friday it had sold the business - which generates the bulk of its revenue in the UK and France - to the world's biggest outsourcer of steel mill services, Harsco. The sale comes one month after Brambles announced it would divest its remaining Cleanaway, Industrial Services and regional business and focus entirely on its CHEP pallet and Recall information management arms.

The Industrial Services sale also caps off a year which marked the company's return to favour with investors following its disastrous merger with the United Kingdom pallet group GKN in 2001.

Brambles shares rose 7c to $10.12 on Friday. In the past 12 months Brambles shares have doubled and are now well up from their $3.77 low set in February 2003. During the year Brambles also rejoined the ranks of the ASX 20.

The low-water mark for Brambles was set at its November 2002 annual meeting where the company admitted it had lost 14 million pallets and would have to spend hundreds of millions of dollars fixing its European and US pallet businesses. The problems were compounded with successive profit downgrades and the departure of its then chief executive, Sir C.K. Chow, in September 2003.

But following a major restructure of its CHEP pallet operations in the US and Europe and major changes among its senior executive ranks, Brambles has gradually won back the favour of investors under chief executive David Turner.

Since completing his restructure of the company's pallet operations, Mr Turner has turned his focus on divesting low-growth businesses. In recent weeks Brambles has announced the sale of its German Cleanaway business for $633 million and of its Eurotainer businesses for $144 million.

It is estimated Brambles will earn up to $2 billion for the remaining businesses it has on the block. These include its Cleanaway operations in the UK and Australia, its Australian Industrial Services business, its Interlake warehouse racking business and its Belgium-based airport ground-handling equipment company TCR.

Brambles said the "release of at least $2.8 billion" from the divestments in coming months would go towards a buyback of its shares or new acquisitions.

The company has announced plans to scrap its dual-listing on the ASX and London Stock Exchange. By having its primary listing on the ASX with a secondary listing in London, the company says it can "eliminate the differential between" its share prices on the two bourses. It says the move will also cut costs.

The Brisbane-based Transpacific Industries has already expressed interest - in partnership with the private equity firm CHAMP - in acquiring Brambles' Cleanaway and Industrial Services businesses in Australia. Transpacific bought Cleanaway's technical (liquid) waste business in June for an undisclosed sum.

Mr Turner was unavailable for comment. Last month, he described the company's decision to focus on CHEP and Recall as "a significant event in the development of Brambles which will allow us to further optimise capital allocation and maximise value for Brambles' shareholders".