BXB: Doing pallets well. Very well!

Brambles (ASX:BXB) is a top 30 company on the ASX with a market capitalisation over $20 billion. It began in Newcastle, NSW in 1875 and listed on the ASX in 1954. During the 1970s it expanded into the UK and Europe and into the USA in the 1990s. Throughout its history it has diversified into different businesses only to divest them at later dates. These have included the Cleanaway waste management business and the Recall records management business.

Today it is a global business with operations in over 60 countries mostly through the CHEP brand. They now have a narrow focus on the business of providing pallets. Pallets are 1.1m x 1.1m wooden platforms that are used to stack goods so that they can then be conveniently loaded onto trucks and transported to warehouses, stores etc. They form an integral part of the logistics supply chain for fast moving consumer goods, fresh produce, retail and general manufacturing.

The vast majority of revenue is derived outside Australia with 55% coming from the Americas, 37% coming from Europe, Middle East and Africa (EMEA) and only 8% coming from Asia-Pacific.

Brambles have a competitive advantage in that they are...