Company result

A strong result. All key CHEP (pallets) geographical segments grew. Pricing power enabled rising input costs (lumber inflation, freight/shipping & transport costs) to be passed through to customers.


Margins improved modestly, with ongoing plant efficiencies. BXB also reported a bumper cashflow, with free cashflow of $622m, versus $462m in FY20.

However, much of that was due to delayed pallet capex, as a result of lumber supply issues (80% of the cost of a pallet is the wood). As such, it would seem reasonable to assume, and management makes clear, that the timing benefit associated with the capex will simply reverse over the next half.

On net, a good result, with the buyback set to recommence in September.

BXB remains a generally good quality company, with reasonable growth prospects, and trading at reasonable value, which is an attractive combination in the current environment.

Important Information: This document has been prepared by Aequitas Investment Partners ABN 92 644 165 266 (“Aequitas”, “our”, “we”), a Corporate Authorised Representative (no. 1284389) of C2 Financial Services, (Australian Financial Services Licensee no. 502171), and is for distribution within Australia to wholesale clients and financial advisers only.

This document is based on information available at the time of publishing, information which we believe is correct and any opinions, conclusions or forecasts are reasonably held or made as at the time of its compilation, but no warranty is made as to its accuracy, reliability or completeness. To the extent permitted by law, neither Aequitas nor any of its affiliates accept liability to any person for loss or damage arising from the use of the information herein.

Please note that past performance is not a reliable indicator of future performance.

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