Brambles lowers profit expectations as shares plummet

Brambles shares fell 70c to $6.52 this week, the lowest since the company combined its UK and Australian stock in November 2006. The stock has dropped 43% in total this year.Speaking at the company’s annual general meeting in Sydney, company chairman Graham Kraehe said that operating profit at its CHEP Americas business was expected to fall by 10% in the current financial year.“Our customers may continue to be affected if the consumer environment remains difficult and this has the potential to further dampen organic growth,” said Kraehe.“The operating environment for our business has … been challenging and may remain so through 2009 and possibly beyond, particularly in the US and Europe.” Just last month Brambles renewed its pallet contract with Walmart, the world’s biggest supermarket chain.Brambles chief executive Mike Ihlein said the company would be relatively shielded from the cutback in consumer spending as its pallets were used mostly to transport essential goods such as groceries. “Consumers, generally speaking and particularly in the US, have less money in their pockets,” Ihlein said. “We’re predominantly in groceries-type products, not in the discretionary spending.”Brambles currently has operations in 46 countries across six continents.

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