Brambles Shares Dive on Wal-Mart Review Plans


Shares in Australian logistics firm Brambles fell almost 18 percent on Friday on concern it may lose business after it said U.S. retailer Wal-Mart Stores was reviewing the way it sources pallets.

Brambles is the world's top pallets supplier, with about 36 percent of its first-half revenue from its American pallet business.

One analyst said the lack of details from Brambles caused the market reaction.

"Basically, they have used Wal-Mart to grow their business in the past. At the beginning it would have had a significant impact, but with the course of the time that has obviously changed," said the analyst, who asked not to be identified.

He said he was still evaluating the impact of any potential loss of business on Brambles' earnings.

Brambles did not give details of the financial impact of any potential loss of Wal-Mart business.

"Wal-Mart had indicated that it may contract directly with third party pallet management service providers to retrieve and sort pallets at its own facilities in the United States or provide such services itself," Brambles said in a statement.

Brambles shares fell as much as 17.7 percent to A$8.25, the biggest one-day percentage fall
since November 2002.

Brambles' CHEP business division offers total pallet management services, which involve retrieval and sorting of pallets.

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