Global pallets, crates and containers supplier Brambles has lifted its full-year profit guidance after strong growth in its core pallets business helped boost first-half profit.
Brambles on Monday reported a two per cent increase in net profit to $US290.9 million for the six months to December 31, 2015.
But taking into account currency fluctuations - 60 per cent of Brambles' revenue is generated in currencies other than the US dollar - net profit was up 14 per cent.
Chief executive Tom Gorman said Brambles was thriving despite significant macro-economic uncertainty and continued intense competition.
"We are in great shape for the second half and for the outlook into FY17 (fiscal 2017)," Mr Gorman said.
He said that as a result of the strong first half and continued momentum in January, Brambles now expects to achieve revenue and underlying profit growth of eight to 10 per cent, in constant-currency terms, for the full 2015/16 financial year.
The company's previous guidance was for growth of six to eight per cent.
Shares in Brambles surged 94 cents, or 8.5 per cent, to close at an eight-year high of $12.00.
Mr Gorman said the first-half result was driven by growth in the pallets business, particularly in North America. The pallets business generates 75 per cent of Brambles' revenue.
Brambles picked up more customers, including large numbers of smaller clients in the US grocery sector.
Sales to the beverage sector were strong as a result of growth in privately-branded water and higher-than-normal temperatures in late summer and early autumn.
Brambles' reusable plastic crates business delivered strong sales growth as it picked new retailer customers in Europe, most significantly Intermarche in France. RPCs are generally used for fresh produce.
In North America, the RPC business was hit by Safeway going back to using cardboard boxes, but this was offset by the strong growth in RPC use by other retailers, including Walmart, Kroger, Loblaw's and HEB.
Revenue from Brambles' container business, which supplies containers to the industrial, oil and gas, automotive and aerospace sectors, fell.
Revenue from the offshore oil and gas sector was impacted as customers cut costs following a heavy fall in oil prices.
Although the industrial, automotive and aerospace sectors lifted revenue in constant currency terms, Mr Gorman said the overall performance of the containers business was below expectations.
BRAMBLES LIFTS GUIDANCE AFTER STRONG FIRST HALF
* First-half net profit up 2pct to $US290.9m, up 14pct in constant currency
* Revenue down 2pct to $US2.75b, up 8pct in constant currency
* Interim dividend of 14.5 Australian cents, up from 14 cents
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