Brambles Ltd saw its shares rise sharply on Thursday following the company’s announcement that it expects to resolve ongoing operational issues in its United States pallet repair network by the end of December. The company reaffirmed its full-year earnings outlook despite challenges experienced earlier in 2026, signaling confidence in a return to growth in the second half of the fiscal year.
The industrial logistics group’s shares closed at $21.23, up 65 cents, reflecting investor optimism. This follows a significant drop earlier in the year when Brambles’ stock plunged 20 percent on a single day in May, marking its worst performance in 24 years. The decline came after two major subcontractors unexpectedly ceased operations mid-contract, severely disrupting Brambles’ US pallet repair activities. The company was forced to rely on more expensive spot freight services and hire replacement labor at premium rates, which cut underlying profits for fiscal year 2026 by approximately $90 million.
Chairman John Mullen, who also chairs Qantas and Treasury Wine Estates, told shareholders at Brambles’ annual general meeting (AGM) that the company anticipated resolving the US business challenges by the end of the first half of fiscal 2027. He expressed confidence in a return to value creation aligned with the company’s investor proposition in the latter half of the year.
CEO Graham Chipchase outlined that Brambles expected to sustain earnings growth and generate strong free cash flow, despite the additional costs and investments required to address repair capacity issues in the US. The company provided guidance for sales revenue growth between 2 and 4 percent and underlying profit growth in the range of 2 to 6 percent on a constant currency basis. Free cash flow before dividends was forecast to be between $800 million and $950 million (US dollars).
The AGM, however, was marked by notable shareholder dissent. Chairman Mullen faced a protest vote amid concerns over his simultaneous leadership roles on three major Australian Securities Exchange-listed company boards. Approximately 22.79 percent of votes were cast against his re-election as chairman, marking his second protest vote of the AGM season following a similar situation at Treasury Wine Estates earlier in October.
Further scrutiny centered on Brambles’ appointment of KPMG as its auditor, amid ongoing reputational issues surrounding the accounting firm. Mullen reported that he personally had reviewed the appointment process, interviewed KPMG’s proposed lead audit partner and its new CEO, John Sams, and received assurances that KPMG’s proposal was significantly stronger than competing bids. The board also considered management’s advice in approving KPMG’s selection.