By Stuart Condie 
 

SYDNEY--Brambles Ltd. said grocery supply chain demand for its CHEP pallets hit record levels in March, more than offsetting falls elsewhere due to automotive manufacturing shutdowns and government lockdowns.

The pallet and logistics firm on Friday said CHEP revenue growth outpaced demand-related increases in pallet repair and collection costs, and more than offset the material impact on the automotive and Kegstar businesses that collectively account for about 5% of group revenue.

Brambles said third-quarter revenue from continuing operations grew 6% to US$1.13, stripping out currency changes. It now expects fiscal 2020 revenue to grow by 5%-7% on a constant currency basis, with underlying profit to grow by 3%-5% on fiscal 2019's US$803.7 million.

It said the new guidance assumed lockdowns and other restrictions would continue through the fourth quarter as the coronavirus drives material changes in operating conditions across all its businesses.

Previous guidance issued with February's first-half results was for revenue and underlying profit to grow by mid-single digits.

Brambles said it had 1.1 billion Australian dollars (US$695.6 million) on deposit and US$1.3 billion of undrawn committed credit facilities at March 28, and was not making any changes to its buyback program or dividend policy.

Chief Executive Graham Chipchase said Brambles was playing a vital role in keeping supply chains moving, with over 80% of revenues derived from consumer staples and grocery supply chains. Staples have been comparatively resilient through the coronavirus pandemic as consumers cut back on discretionary spending.

Brambles shares last traded at A$11.39, down 2.4% in 2020.

 

Write to Stuart Condie at stuart.condie@wsj.com

 

(END) Dow Jones Newswires

April 16, 2020 19:16 ET (23:16 GMT)

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