Business Analysis & Valuation Project Brambles

Executive Summary

Brambles is a pooling solutions company which supplies reusable pallets, crates and containers as well as the associated logistic services under the brands of CHEP and IFCO along with information management solutions through Recall internationally (Brambles, 2013). The company has a headquarter in Sydney, Australia which maneuvers across various supply chains all over the world including in the United States (US), Europe and Asia-Pacific Region (Brambles, 2013).

In terms of the attractiveness of industry in which Brambles operates, our analysis as a whole considers the attractiveness to be medium which may allow the company to continue growing despite of the challenging market condition. Porter’s Five Forces Model is employed to provide a comprehensive assessment on the current condition of the industry.

In our attempt to study the effectiveness of Brambles’ corporate strategy, SWOT analysis is conducted so that the various factors which determined Brambles’ success can be identified and from there, the company’s prospect is estimated. An evidence of earnings manipulation has also been identified in the accounting analysis which therefore may suggest a less fair presentation of the company’s financial statements.

In terms of the company’s financial condition, our analysis concludes that Brambles performance fluctuated over the last four years from 2009 to 2012, but an improvement can be seen in 2012. However, when comparison is made with the market, its industry and peers, Brambles shows a superior performance.

Nevertheless, we estimate Brambles’ intrinsic value as AUD 9.13 which is considerably equivalent to the last observed market price of Brambles which was valued at AUD 9.13 as at 27th May (Morningstar, 2013) and since in the last few months the price was around 8.17 to 9.50. We therefore propose a recommendation that investors should hold their position in Brambles.

Introduction to the Company and the Industry

Industry...