More on Brambles
Brambles: disposal and acquisition
Brambles has sold one of its waste disposal businesses, Cleanaway Germany for £387m. It has also bought an Australian document management businesss for £112m.
The acquisition has been at only a slightly higher valuation multiple than the sale, so the net effect on profits of the transactions will be fairly small - it should sightly lower EPS for the year. However document management is a higher growth business and one in which Brambles in particular is performing better (Cleanaway’s operating profit fell 6% last year). This makes the combination of deals look positive.
At 317p Brambles is trading on a prospective PE of around 20× with a yield of 2.8%. We expect strong cyclical recovery but little long term growth.
Random picks: Aggregate Industries | Body Shop | Euromoney | ICI | Inchcape | Investec | Marconi | WPP | Wimpey | Go-Ahead Group