2009-04-03 Brambles drops 13 per cent on Pepsico loss
Brambles’ share price dived 13 per cent on news that the
company’s CHEP pallet operation lost a significant amount
of Pepsico business in the USA, but the company has denied the loss
will have a big impact on its results.
In a statement to the Australian Stock Exchange to explain the change in the price of Brambles’ securities from a close of $5.65 on 24 March 2009 to an intra-day low of $4.97, Brambles group company secretary Robert Gerrard said:
“Brambles became aware [yesterday] of market reports concerning the loss of a pallet pooling contract with the Quaker Tropicana and Gatorade (QTG) business units of PepsiCo in the United States.
“Brambles confirms that, as part of the ordinary course of business, QTG has informed its customers that it will commence converting to a new pallet provider from 1 April 2009. QTG's decision does not impact CHEP's other business with PepsiCo in the United States or elsewhere around the world.
“This contract represents less than 0.7% of Brambles' annual sales revenue and is immaterial, particularly as Brambles continues to win new business that far exceeds any contract losses.
“The CHEP business model remains robust, and CHEP is continuing to win significant new business, through both converting customers from white wood and winning customers from competitors. As announced on 16 February 2009 with Brambles’ FY09 half year results, the impact of net new customer wins in the first half of the 2009 financial year alone is expected to contribute annualised sales of US$80 million, being approximately 2% of Brambles’ annual sales revenue,” he said.
Brambles shares closed at $5.20 today.