ssb upgrades to 6.40 target, page-3

re: ssb upgrades to 6.40 target - a lie!!! This is all the real post said. It did not give any price.

BIL – Trading the Trading Update

Brambles is due to deliver its trading update on Wed 26th May 2004 at 8.30am AST. We expect it will cover all of its core businesses (CHEP, Cleanaway, Recall and Industrial Services) and be quite positive.

While specific numbers for the 10 mths to April are unlikely to be given, we do expect Brambles will try and make it clear that it expects a sharp rebound in H2 profitability and for an even better FY05E.

We continue to believe the two key highlights of the update will be: (1) CHEP USA’s significant improvement in H2 EBITA margins and (2) Cleanaway UK’s lift in EBITA (new contracts and rationalization).

We believe CHEP USA is on track to lift EBITA margins from 8.5% in 1HFY04 to around 11% in 2HFY04 on sales growth of 8-10% (constant currency) and that $27m of costs in 1HFY04 were actually “oneoffs”.

The only areas we believe that may disappoint are Recall Europe and Interlake US. Iron Mountain revealed European trading difficulties in its recent 1Q result; we expect Recall had similar issues.

Encouragingly, the lower A$, the 20-40% price rises CHEP Europe is currently levying on some of its fast moving consumer goods customers (like Heinz, Kellogg and Unilever) along with the potential for good news at the trading update should result in FY05E upgrades.