By Stuart Condie


SYDNEY--Brambles Ltd. shares rose in morning trade despite the company warning of potential price and supply-chain challenges as it reinvests in new pallets.

The ASX-listed company on Wednesday said that free cash flow after dividends would improve in its 2023 fiscal year compared with the previous fiscal year, but remain negative due to the reinvestment. Brambles said a US$470 million impact from lumber inflation on new pallet purchases in fiscal 2022 offset higher earnings.

"The level of underlying improvement is dependent on lumber and pallet pricing, normalization of inventory levels and flows across global supply chains," Brambles said.

Shares in Brambles were up 3.9% at A$12.26 after the company raised its final dividend by more than expected following a 10% rise in underlying annual profit.

RBC Capital Markets analyst Owen Birrell said that the fiscal 2022 result was solid and the fiscal 2023 outlook was in line with expectations. He cited a second-half improvement in return on capital invested at Brambles's Americas unit as his key highlight.


Write to Stuart Condie at stuart.condie@wsj.com


(END) Dow Jones Newswires

08-16-22 2117ET