Trouble stacking up at Brambles

PROBLEMS at Anglo-Australian pallets giant Brambles appear to be getting more tangled despite its efforts to unscramble them.

The group's Sydney shares dropped sharply as concerns grew about new turmoil in its US operations, which account for about a fifth of overall revenue.

With news that two more senior executives have left its Chep Americas unit, the stock dived 13 cents to A$4.67, the worst performer among the market's 200 largest companies.

Brokers said the world's largest freight-pallets business, grappling with quality problems in Europe, now appeared to face serious upsets on two fronts.

The clear-out in the US is in marked contrast to the largely upbeat tone taken by Brambles on its US operations in its most recent trading update, in June.

Now it says Gordon Kirsch, vice-president of operations and quality, and chief financial officer Keith Norder, have quit. Their exit means the top team in that vital market will have virtually all gone in the space of just a few weeks. In June, president Rex Lowe and Jack Sparn, a top information executive, were shown the door.

Brokers said it was troubling that Brambles had not given a reason for the most recent departures, prompting analysts to speculate about the extent of any problems.

The wider market was firmer, but off early highs. Aided by strength in duallisted Singapore Telecommunications, which lifted the lid on sparkling interims yesterday, the All Ordinaries index was ahead 11.2 points at 3135.70. SingTel was one cent better at A$1.45. Resource play BHP Billiton added seven cents to A$10.19 as investors cheered an oil discovery at one of its wells in the Gulf of Mexico.

Japanese investors cashed out of positions ahead of a week in which, although not a national holiday, lots of people traditionally take time off to spend with family. Still, the Nikkei 225 Average gained 61.97 points, or 0.7%, to 9327.53, ending a run of four losing days. It was down 3% on the week.

Mobile phones giant NTT DoCoMo rose 11,000 yen, or 4%, to 280,000 yen after the company said first-quarter net profit was 197bn yen (£1.02bn). No comparable figures were available, but analysts said growth in third-generation phone demand was encouraging. Sega, creator of games icon Sonic the Hedgehog, was stronger after reaffirming its full-year target of 7.5bn yen net profit. First-quarter earnings were 1.9bn yen and its shares rose 29 yen, or 2.7%, to 970 yen.

Singapore Airlines took some flak as a group of local entrepreneurs decided plans to start a low-cost rival based at Changi International Airport were definitely on from next year. SIA, down 20 cents, or 1.8%, to S$10.70, has had a tough year, posting an unprecedented half-year loss on the impact of the killer Sars virus. The Straits Times index closed unchanged at 1533.6.

In Hong Kong, Cathay Pacific Airways nosed higher amid continued hopes it was set for a strong second half. The shares rose 15 cents to HK$11.45. The Hang Seng index fell 12.8 points to 9945.2.

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