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Brambles Industries (BI.)

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Wednesday 27 February, 2002

Brambles Industries

Interim Results Part 1

Brambles Industries PLC
27 February 2002

                              Brambles Industries

                               Interim Statement

                   For the six months ended 31 December 2001

             For the Combined Businesses of Brambles Industries plc

                        and Brambles Industries Limited

Brambles Industries



Financial highlights                                                                                        1
Overview                                                                                                    2

Financial review                                                                                            5
Business review                                                                                             9
Appendix I - GAAP Reconciliation                                                                           19
Appendix II - Standardisation of the Accounting for Pallets                                                21
Appendix III - Appointments - CHEP International and Recall                                                25

Brambles Industries
Combined profit and loss account                                                                           26
Combined balance sheet                                                                                     27
Combined cash flow statement                                                                               30
Segmental analysis                                                                                         31

Brambles Industries plc financial information                                                              35
Independent review report                                                                                  38





£ Millions                                               6 months to      6 months to 31        Increase/
                                                         31 December       December 2000       (Decrease)               
                                                                2001                                    %

Results Before Exceptional Items and Goodwill

Continuing Businesses
Revenue                                                       1,473                1,317               12
Operating Profit                                                201                  220              (9)


Revenue                                                       1,619                1,537                5
Operating Profit                                                212                  237             (11)
Profit Before Tax                                               160                  186             (14)
Earnings per Share (pence)                                     6.8p                 7.3p              (7)

Group Results After Exceptional Items and
Goodwill Amortization

Profit Before Tax                                                34                   90             (62)
Profit After Tax                                                 15                   38             (61)
Earnings per Share (pence)                                     0.9p                 2.3p             (61)
Interim Dividend per Share                                    3.59p
Record date for determining
 entitlements to the dividend                         22 March 2002
Net Debt                                                      1,872                1,649


Brambles has reported strong revenue growth from its key businesses for the half
year ended 31 December 2001.

This was the first reporting period for the new Group since the merger on 7
August 2001, of Brambles Industries Limited with the support services businesses
of GKN plc.

CHEP, Cleanaway and Recall each recorded significant sales growth. Despite a
difficult period in its key United States and European markets, revenue from the
Group's continuing businesses (ie excluding businesses listed for divestment)
rose 12% to £1.473 billion  (13% in constant currency).

Group profit from continuing businesses (before tax, goodwill amortisation and
exceptional items), was 9% lower (7% in constant currency) at £201 million
compared with £220 million last year.

Group profit before tax, goodwill and exceptional items at £160 million was £26
million or 14% lower than the same period last year and earnings per share at
6.8p was 7% lower.

The Group has also improved its strategic focus further through successfully
executing its divestment programme which is expected to realise some £450
million. The sale of Ensco was completed in July, agreement was reached for the
sale of CAIB, the rail wagon division and the two major equipment rental
businesses (Brambles Equipment Services in the US and Wreckair in Australia)
have now been sold.

Following the merger the Group has undertaken a comprehensive review of CHEP's
operations and launched a range of initiatives to ensure its continued long term
growth and profitability.

These include improvements in the management of the rapidly growing pallet pool
in the United States and the standardisation of the Group's accounting for
pallet depreciation and loss provisioning.

As a result of the standardisation, a net charge of £23 million is included in
the half year results as an operating exceptional item.

In support of continuing growth, CHEP and Wal*Mart have reached agreement in
principle that the contract for the provision of total pallet management
services should be extended for a further 5 years.  The new agreement will
ensure that Wal*Mart has an uninterrupted flow of quality CHEP pallets filling
the majority of their Distribution Centre (DC) pallet positions. It will also
improve the asset utilization and economics of CHEP's Total Pallet Management
(TPM) Programme.

Within CHEP's management, Bob Moore, CHEP's Chief Executive Officer (CEO) will
be retiring from the group on 27 February after 7 successful years at its helm.
Bob has agreed to remain with CHEP in a consultancy capacity until 30 June to
facilitate a smooth succession.

With immediate effect, Bob is being succeeded as CEO of CHEP, by Victor Mendes,
President of Recall.  Victor has led the highly successful globalisation and
rapid growth of Recall over the past three years.

At Recall, Victor will be succeeded by Al Trujillo currently President of Recall
USA.  Al has been with Brambles and Recall since 1996.

Further details of these management moves are contained in Appendix III to this
press release.

Commenting on the latest result, Brambles Chief Executive Officer, Sir C K Chow

'The strong revenue growth momentum of CHEP, Cleanaway and Recall continued
during the last six months despite difficult economic conditions.

'We have also put in place a number of initiatives in CHEP to improve asset
productivity, optimise operational efficiency and create a solid base for the
future development of this unique business.

'While we have a considerable task ahead of us, we look to the future with
confidence underpinned by continuing growth in sales.

'The initiatives now in place in CHEP are expected to yield improved results as
the calendar year progresses, and will provide a base for accelerating
improvement in the next financial year.

'Cleanaway and Recall should continue to grow.  While there will inevitably be
some dilution from businesses sold, the performance of continuing businesses as
a whole is expected to make progress in the second half when compared with the
same period a year ago.'

For further information contact:

Media             Richard Mountain, Financial Dynamics                      +44 (0) 20 7831 3113
Investor &
Other:            Sue Scholes, Head of Investor Relations                   +44 (0) 20 7659 6012

Enquiries:        Ron Burke, Group General Manager,                         +61 (0) 2 9256 5255
                  Corporate Affairs
                  Edna Carew, Group Manager                                 +61 (0) 2 9256 5204

An analyst briefing will be held in London at 9am on 27 February.  This will be
webcast and available with the slides on our website (

This release has been prepared under UKGAAP.  Brambles Industries accounts
prepared under Australian GAAP are being lodged at the Australian Stock Exchange
simultaneously with this release and are available on our website.

          Brambles Industries is globally headquartered in Australia.


Group revenue at £1.62 billion was 5% higher than last notwithstanding the
adverse impact by businesses divested.  Revenue from continuing businesses
(excluding businesses identified for divestment) at £1.47 billion, increased by
12% compared to the same period in 2000 (13% in constant currency).

CHEP, our pallet and container pooling business, continued to be the largest
contributor to revenue with sales of £591 million comprising 40% of revenue from
continuing businesses.  CHEP's sales were 14% ahead of the corresponding period
last year (14% in constant currency).

Our waste management business, Cleanaway, which contributes 32% of revenue from
continuing businesses, also increased sales significantly.  The rise of 24% was
due largely to the contribution from the Serviceteam acquisition in the UK, in
early 2001.  Sales in Germany were somewhat lower due to prices for recycled
paper being below the high levels achieved in the corresponding period in 2000.

Geographically, the major part of Brambles group revenue continues to be
generated in Europe and North America with 51% and 30% respectively, of revenue
from continuing businesses.

Operating profit from continuing businesses before tax, goodwill amortisation
and   exceptional items was down by 9% to £201 million compared with the six
months to 31 December 2000.  In constant currency the reduction was lower, at
7%.  Including businesses held for divestment, Brambles operating profit was
£212 million, down by 11% compared with last year and by 9% in constant

CHEP's operating profit was lower overall despite a strong half year in
Australia and South Africa.  The Americas and Europe were both impacted by the
continuing short  term adverse cost impact of growth investments.

Cleanaway's profit was well up in the UK though Germany was still impacted by
comparison with the prior year, a period in which recycled paper prices were
significantly higher.

Recall continued to grow very strongly.  Profits were up by 50% as a result of a
combination of its acquisition led growth strategy and its productivity
improvement initiatives driven by global standardisation.

Industrial Services also generated good profit growth, particularly in Australia
where the cost base was significantly reduced following a restructuring
programme in 2000.  In our regional businesses, the weakness of the US economy
continued to impact Interlake Material Handling adversely.

The net interest charge was £1 million higher than in the 6 months to 31
December 2000 at £52 million.  The impact of the lower rates of interest was
offset by debt levels which were higher than the year earlier, albeit similar to

Business Disposals and Exceptional Items

The business disposal programme is almost complete with anticipated proceeds of
some £450 million.  The sale of ENSCO in the US was completed in July 2001 and
the US Equipment Rental business (BESI) was sold at the end of 2001.   The sale
of Wreckair was completed in February 2002 and agreement was reached for the
sale of CAIB, the European Rail Wagons business.  This sale is expected to be
completed in the first half of 2002 pending regulatory approval.  In addition,
agreement to sell the Group's North Western Shipping and Towage business in
Australia was reached earlier this month.

The results for the half  year include an exceptional charge of £111 million. It
includes dual listed companies set up costs of £30 million which under UK
accounting principles were charged in the first half.   It also includes the net
loss on the sale, and write-down of the equipment businesses, BESI, Wreckair and
Gardemann, as well as a net charge of £23 million from the standardisation of
the accounting treatment of CHEP pallet depreciation and loss provisioning.  A
gain of around £100 million before tax is anticipated from the sale of CAIB and
this will be recognised upon completion.

The standardisation of the accounting for pallets in terms of both depreciation
and loss provisioning is described in Appendix II to this press release.  The
charge of £23 million in the half year results from a reduction in depreciation
of £13 million, offset by the one-off write-down of the carrying value of
certain pallets, amounting to £36 million.  The net effect on profits before tax
will be reduced from £23 million in the half year to £10 million in the full
year as the ongoing reduction in depreciation feeds through.

On a continuing basis, the increase in loss provisioning of about £9 million
annually will be more than offset by the net decrease in the pallet depreciation


The pre exceptional tax charge of £45 million was approximately 31% of profit
before tax and exceptional items but after goodwill.  It compares with a rate of
36% in the same 6 months last year which has been adjusted to allow for fully
deferred tax accounting in both years.   The principal reasons for the reduction
relate to lower corporate tax rates in Australia, Germany and France coupled
with the realisation of some tax losses in Germany and Australia.

Cash Flow

Net cash flow before financing improved at a net outflow of £73 million compared
with an outflow of £199 million last year.

Cash flow from operations before capital expenditure, interest and tax was £264
million compared with £325 million last year.

Capital expenditure in the period was £304 million.  This represents a decrease
of £75 million compared to the 6 months to December 2000. Capital expenditure in
CHEP was £220 million, £38 million lower than last year.  Expenditure on
acquisitions was £24 million and included a number of small businesses within
Recall.  Disposals realised £97 million, including Ensco and  BESI.

Working capital requirements increased by £23 million due principally to the
acquisition of Serviceteam by Cleanaway in the UK and reduced payables within

Indebtedness at £1,872 million was similar to the level of £1,869 million at 30
June 2001, albeit higher than £1,649 million at the end of December 2000.


The Board has declared an interim dividend of 10.0 cents per share for all
shareholders in Brambles Industries Limited and an interim dividend of 3.59
pence per share for all shareholders in Brambles Industries plc.

The dividend per share in each company is the same, with the exchange rate
struck on Friday 22 February 2002.  The dividends will be paid on 11 April 2002.


£M                                6 months to December 2001   6 months to December 2000      Change %
Sales                                        591                         519                    14
Operating Profit                             107                         128                   (16)

Sales were some 14% higher than the same period last year and profits were 16%
lower (14% higher and 15% lower in constant currency).

CHEP Americas sales continued to grow strongly, up by 20% to £286 million (19%
in constant currency).  This sales growth was achieved against a slowdown of
economic activity particularly in the US coupled with manufacturer/retailer
destocking in the last quarter of 2001.

In the past two years, CHEP USA has undertaken a very significant growth
investment programme to enhance its market leadership:

  • Investment in pallets and total pallet management service to gain Wal*Mart
  • Support customers to ship more products on CHEP pallets to a wider range
    of distributors.
  • Launch Returnable Transit Packaging containers (RTPs) for perishable
  • Improve customer service and asset management through increased collection
    activity and higher repair standards.

This programme has led to a number of short term cost increases.  These include
higher depreciation charges from hire stock investment, higher collection and
repair costs, launch costs of RTPs, and certain operating costs linked to
rationalising the old US depot infrastructure.  The impact of SAP implementation
was small as its installation is at an early stage and is on track for
completion during the last part of the current calendar year.

As a result of this programme, operating profit in CHEP Americas for the 6
months was down by 22%.

During the last six months, CHEP management has put in place a number of
initiatives to address all of these issues, while not prejudicing the future
growth of business.

A new agreement was reached in principle with Wal*Mart in February 2002 which
will strengthen Wal*Mart's advocacy of CHEP services, and at the same time
improve the economics of the total pallet management service to CHEP.

Channel pricing and a surcharge on CHEP pallets destined for non-participating
distributors (NPDs) were both introduced.  A dedicated organisation was formed
within CHEP to convert NPD's to participating distributors (PDs), and CHEP's
customers are encouraged to help the process.  An incentive programme was also
introduced to reimburse pallet recyclers in the US for the cost of transporting
pallets back to CHEP.  The financial exposure relating to pallets held in NPDs
is being addressed through the write down of the value of those pallets proving
slow to collect.  This, coupled with the standardisation of depreciation and
loss provisioning policies within the CHEP group, is described in Appendix II of
this release.

The depot infrastructure of CHEP in the US has been thoroughly reviewed, taking
into consideration changing customer infrastructures and market profile.  An
enhanced depot reconfiguration programme is being put in place to optimise
operational costs.

There are encouraging signs that our efforts to improve asset productivity are
yielding positive results.  Hire stock capital expenditure in the US was down
39% compared to a year ago while revenue growth remained high.

RTP revenues in the Americas were well up, by 71% in the US, albeit still
representing less than 5% of the sales of CHEP Americas.  RTP results are near
break-even at the gross margin level, and are expected to turn positive in the
second half.  Increasingly the industry is adopting a standard footprint for
RTPs and this is advantageous to the development of CHEP's pooling service in

CHEP Canada has further enhanced its market position and is continuing to grow.
CHEP Mexico and Chile continued to perform strongly, and CHEP's Brazilian
operations have already become profitable.

In Europe, sales growth accelerated as expected in the first half.  Sales were
up by 11% compared with the same period last year (10% in constant currency), to
£249 million.  Geographic penetration is continuing; a contract has been signed
with a major FMCG manufacturer and will result in the first breakthrough in
Italy.  A CHEP service has also been established in Central Europe.

RTP sales in Europe grew by 34% in the first half.

Operating profits in Europe were down on last year by 19% (19% also in constant
currency).  As expected, the IT roll out costs impacted profits adversely and
depreciation on the higher pallet asset base continued to grow.  Aggressive
collection activity to improve the asset utilisation resulted in higher
collection transport costs.  As was the case in the US, the repair backlog,
which was inflated by pallet collection initiatives, was significantly reduced
by the end of the period.  For the six months as a whole this resulted in repair
volumes increasing by 27%.

Performance in France continues to be under pressure resulting from local
competitive activity.  This has led to some limited price erosion in that

Looking forward, there should be a continuation of the growth in sales in
Europe. The next half year will continue to see higher IT costs due to the SAP
roll out. Parallel running will be eliminated in Europe during June 2002.
Repairs and transport costs should stabilise in the period.

The CHEP Asia Pacific region had an excellent half  year with sales ahead by 11%
and operating profits well up on the same period last year.  Australia continues
to perform strongly and the smaller pools in New Zealand and Asia were all

CHEP South Africa also had a very good half  year with sales and profits in
constant currency both up significantly compared with the prior year.
International pooling and further development of the Intermediate Bulk
Containers (IBC's) business both contributed to the growth.

For CHEP overall, programmes have been put in place to improve asset
productivity and to optimise operational costs.  There will again be certain
related short term costs in the second half of this financial year but capital
expenditure will continue to reduce.  Overall CHEP's performance is anticipated
to stabilise in the second half and improve in 2002/3.  Any improvement in
economic activity, which results in the associated replenishment of the American
inventory pipeline, will bring added benefits to CHEP.


£M                                 6 months                  6 months
                                 December 2001             December 2000               Change %
Sales                                 478                      385                        24
Operating Profit                       51                       48                         6

Sales and profit in Cleanaway were up by 24% and 6% respectively compared with
the same period last year (25% and 6% in constant currency).

In the UK sales were well ahead due principally to the inclusion of Serviceteam
for the first time.  Serviceteam was acquired in January 2001 and has since been
successfully integrated.  Profits were also up on last year, in part due to
inclusion of Serviceteam which generates a higher return on capital employed
albeit at a somewhat lower margin on revenue due to its service orientation.
Profits were also aided by the continued recovery and ongoing strength of the
collection business through firmer prices and reduced customer churn.

Technical waste in the UK continued good performance and delivered solid growth.
A state of the art material recycling facility (MRF) was opened in Rainham.
Cleanaway UK has won or renewed a number of municipal contracts with a total
contract value of £110 million.

Sales in Cleanaway Germany were down by about 12% on the same period last year.
This was due almost entirely to the impact of lower paper prices in the first
part of the half  year compared with the abnormally high prices in 2000.  Paper
prices have been stable since January 2001.

Profits were slightly down on last year in Germany; again this was due to the
paper price impact with the underlying German businesses performing steadily.

The PET bottle recycling facility in Rostock, Germany, is now operational.  A
new industrial waste sorting plant was commissioned in Berlin.

Cleanaway has also won a licence to operate a landfill site in Tallinn, which
will enhance its growing market position in Estonia.

In Australia, sales were approximately 5% ahead of last year (12% in constant
currency).    A number of new contracts were gained including one from Cyberlynx
for services to some of Australia's largest corporations such as Woolworths and
the Commonwealth Bank.

The Asian businesses while relatively small made good progress.  A new
industrial landfill licence was gained in Taiwan.


£M                                 6 months                  6 months
                                 December 2001             December 2000               Change %
Sales                                 107                       83                        29
Operating Profit                       18                       12                        50

Sales in Recall increased by 29% compared with the same period last year with
profits up by 50% to £18 million (32% and 56% in constant currency).

Recall performed strongly throughout the half year and has continued to improve
its operating margins as a result of its global standardisation initiatives.  It
proved resilient to the softening of the US economy with growth in the Americas
continuing to be strong both in sales and profit terms.  The underlying American
business should benefit from increased awareness of the need for security in
document retention and destruction.

Recall added six new cities to its global Document Management Service (DMS)
operations in Norway, Denmark, Brazil and Germany and is now offering this
service to 68 markets around the world.

The Recall - DMS business has consolidated its information centres in Italy and
is continuing to convert its operations to its web-based ReQuest operating
system.  Some 35% of Recall's global holdings now operate under this system.
This figure is expected to reach 75% by mid 2002.

A state-of-the-art DMS mega centre was completed in Toronto.  Four more mega
centres in Milan, Boston, Mexico City and Singapore are expected to open during
the rest of 2002.

Recall is the world's leader in Secure Destruction Service (SDS).  In the last
six months, twelve new markets were added in North America.

In Europe, Recall has assimilated Cleanaway's Dassler operations in Germany.
SDS operations have also been established in London and Birmingham in the UK
Recall is now offering SDS in 52 markets worldwide.

For Recall's newest service, Integrated Document Solution (IDS), the basic
infrastructure has now been completed with two global ReView Data Centres
brought on-line in Atlanta and Milan.  A major contract was won with Brazilian
Banking Federation for digitisation and processing of pension account

Recall is continuing to develop its global presence and its position as one of
the world's leading companies in its field.


£M                                 6 months                  6 months
                                 December 2001             December 2000               Change %
Sales                                 157                       163                       (4)
Operating Profit                       12                        10                       20

In constant currency, sales were the same as last year and profits up by 22%.
Sales and profits of Industrial Services businesses in the Northern Hemisphere
were down slightly on last year with weaker performances in Steel Services in
France, the Netherlands and the US resulting mainly from a downturn in the steel
industry.   The Heavy Contracting business also suffered from a slowdown in
investment projects following the September 11 events.

The UK Steel Services performed robustly with the cessation of steel making at
Llanwern having a limited impact on profitability.  The Corus Port Talbot blast
furnace incident will have a negative effect in the second half. However the
recent decision of Corus to rebuild the No. 5 blast furnace gives confidence for
the long term profitability of the South Wales business.

The construction of Brambles pulverized coal injection (PCI) plant at BHP Steel
- Port Kembla is near completion and expected to start operations in April 2002.

In Australia, Brambles Industrial Services has bounced back strongly following
significant rationalisation of the cost base in 2000.  It is the leading support
service provider to the resource industry in Australia.


£M                                 6 months                  6 months
                                 December 2001             December 2000               Change %
Sales                                 140                       167                      (16)
Operating Profit                       13                        22                      (41)

Regional businesses comprise five activities, Interlake Material Handling,
Meineke, Brambles Marine and two joint ventures, Eurotainer and TCR.

Sales and profits of the businesses were substantially down on the corresponding
period last year (by 15% and 40% respectively in constant currency).

Interlake was the largest contributor to the shortfall. Interlake is the leading
pallet and container racking provider in the US.  From the second quarter of
2001, its market has been affected by the slowdown of the US economy and the
substantial reduction of new distribution centres and retail warehouses.  This
was compounded by the availability of secondhand equipment from failed
e-commerce ventures.  Interlake continued to trade weakly in the first half.
Nonetheless, its management has taken effective action to reduce its cost base.
One plant was closed, and its workforce was reduced by 30%.  It remains
profitable and is well positioned to take advantage of any recovery in the

The profit of Brambles Marine was down on last year.  The Bass Strait shipping
operation was affected by slow manufacturing activities in Tasmania, but it
continued to generate good returns.  The entry of a new participant in the Bass
Strait will increase competitive pressure on this business going forward.

Trading conditions of the small Torres Strait shipping business were difficult,
and North-Western Shipping and Towage was divested.

The other businesses in this category performed steadily.


The divestment programme has been successful and is now almost complete.

The half year started with the completion of the Ensco sale in July and was
followed by the completion of the sale of Brambles Equipment Services in North
America at the end of the half year.

Agreement was also reached on the sale of Wreckair, the equipment rental
business in Australia and CAIB, the pan European rail wagon division of
Brambles.   The Wreckair disposal has since been completed, in February 2002
while the completion of CAIB awaits regulatory approval.

Once these transactions have all been finalised, proceeds from the disposal
programme will amount to some £450 million.

In addition to these businesses a number of small activities on the fringe of
Brambles business in Australia have also been divested.


The initiatives now in place in CHEP are expected to yield improved results as
the calendar year progresses, and will provide a base for accelerating
improvement in the next financial year.

Cleanaway and Recall should continue to grow.  While there will inevitably be
some dilution from businesses sold, the performance of continuing businesses as
a whole is expected to make progress in the second half when compared with the
same period a year ago.

                                                                   Appendix I(a)



                                           Unaudited       Management     GAAP adj
                                              UKGAAP       Commentary       in $AM      AGAAP
                                               in £M           in $AM                  in $AM

Subsidiaries                                   1,585            4,492

Share of associates                               34               97
                                               1,619            4,589
Operating Profit

 Before goodwill amortisation and
   exceptional items                (a)          208              589
  Goodwill amortisation                         (15)             (44) (b)
  Exceptional items                             (46)            (130)
 Total                                           147              415
Share of associates
 Before goodwill amortisation       (a)            4               12 (b)

 Goodwill amortisation                           (0)              (1)
 Total                                             4               11

Operating Profit                                 151              426

Exceptional items                               (65)            (186)
Profit on ordinary activities
before interest and taxation                      86              240
Net interest payable                            (52)            (147)
Profit on ordinary activities
before taxation                                   34               93           75        168 (ASX line # 1.5)
Tax on profit on ordinary
activities                                      (45)            (127)         (11)      (138)                           

Tax on profit on exceptional                    
items                                             27               77            -         77

Profit on ordinary activities
 after taxation                                   16               43           64        107

Minority interest                                (1)              (1)            0        (1)
                                                  15               42           64        106 (ASX line # 1.11)
Operating Profit                    (a)          212              601 (b)

Adjustments comprise differences in accounting between Australia and the UK 
which are excluded to present trading data for consistent comparison.  
Items include:

- DLC costs taken up last year for Australian reporting but included in the 
  current period for UK reporting

- continued amortisation of certain goodwill for Australian reporting which had 
   been written off for UK, etc

Segment Report

Operating Profit

CHEP - Pallet and container pooling              107              302

Cleanaway - Waste management                      51              143

Recall -Information management                    18               52

Industrial services                               12               35

Regional businesses                               13               37
Continuing businesses                            201              569

Divestments                                       15               43

Unallocated                                      (4)             (11)

Total                                            212              601

                                                                   Appendix I(b)




                                          Unaudited       Management     GAAP adj
                                             UKGAAP       Commentary       in $AM      AGAAP
                                              in £M           in $AM                  in $AM

Subsidiaries                                  1,502            3,996

Share of associates                              36               96
                                              1,538            4,092
Operating Profit

 Before goodwill amortisation
 and exceptional items           (a)            233              619 (b)
 Goodwill amortisation                         (11)             (29)
 Exceptional items                             (94)            (249)
 Total                                          128              341
Share of associates
 Before goodwill amortisation      (a)            4               10 (b)
 Goodwill amortisation                                             0
 Total                                            4               10
Operating Profit                                132              351
Exceptional items                                 9               24
Profit on ordinary activities
before interest and taxation                    141              375
Net interest payable                           (51)            (136)
Profit on ordinary activities
before taxation                                  90              239           43        282 (ASX line # 1.5)
Tax on profit on ordinary
activities                                     (63)            (167)            2      (165)                            

Tax on profit on exceptional                   
items                                            11               30                      30

Profit on ordinary activities

 after taxation                                  38              102           45        147

Minority interest                                                (1)            0        (1)
                                                 38              101           45        146 (ASX line # 1.11)
Operating profit                   (a)          237              629 (b)

Adjustments comprise differences in accounting between Australia and the UK 
which are excluded to present trading data for consistent comparison.  
Items include:

- DLC costs taken up last year for Australian reporting but included in the 
  current period for UK reporting

- continued amortisation of certain goodwill for Australian reporting which had 
  been written off for UK, etc

Segment Report

Operating Profit

CHEP - Pallet and container pooling             128              339

Cleanaway - Waste management                     48              128

Recall - Information management                  12               32

Industrial services                              10               27

Regional businesses                              22               59

Continuing businesses                           220              585

Divestments                                      17               44

Total                                           237              629

                                        Appendix II


Following the merger of the ownership of CHEP, a comprehensive management review
has been undertaken of the control and accounting for pallets across the Group.
This has resulted in a number of new initiatives relating to the management of
the pallet pool, notably in the rapidly expanding North American market.  It has
also provided an opportunity for the different accounting practices relating to
pallet depreciation and loss provisioning, which varied across national pools
and between countries, to be standardised.

The accounting changes have no impact on the cash flow of the business as they
relate solely to the carrying value of different categories of pallets.


It has for some time been recognised that the method of calculating depreciation
of the CHEP pallet pool, currently on a 10% straight-line depreciation to nil
residual value albeit with variations between territories, resulted in an
element of double counting of cost.   This arises since the pallets are not only
depreciated to nil residual value over 10 years but are also repaired as
necessary on a continuous basis.  The repair costs, as with the annual
depreciation charges, are expensed to the CHEP profit and loss account.   This
policy had the effect of  reporting unduly conservative profits of the business.

As a consequence of the review, depreciation will be standardised across  CHEP's
global businesses.  A residual value assessed at 25% of the original cost of a
pallet will be introduced into the depreciation calculation. This level of
residual value is conservative and is supported by historic values of secondhand
'white' pallets.  The 10-year life and straight-line depreciation methodology
will be retained.

The impact of this change on the accounts for the first half of 2001/2002 is a
credit of £15.9 million (A$45.4 million).

Coincidentally and in recognition of a customer preference for the block pallets
in the US, depreciation of the old pool of 13 million stringer pallets will be
accelerated so as to depreciate fully this pool over a period of 5 years.  The
charge to the half-year profits in respect of the accelerated stringer pallet
depreciation is £2.5 million (A$7.1 million).

There are also 2.3 million stringer pallets awaiting repair  which have not yet
been fully depreciated.  In view of the customer preference for block pallets
these are uneconomical to repair, and will be written off at a one off cost of
£10.5 million (A$30.0 million).

Loss Provisioning

The growth in CHEP's business in North America has accelerated since the
original agreement with Wal*Mart under which Wal*Mart advocated the use of CHEP
pallets to their suppliers. The rate of change in the pattern of trading in
North America has also accelerated since the expanding customer base is
servicing an increasingly broad spectrum of distributors.  As a consequence,
pallets have been issued to manufacturers delivering to locations operated by
non participating distributors (NPDs) ie those without an obligation to sort and
return the pallets.  A proportion of these pallets are proving slow to return.

It has always been CHEP's policy never to abandon its pallets and in order to
address the pallet build up with NPDs, a number of initiatives have been put in
place to facilitate their collection.  These include conversion of
non-participating distributors to participating distributors, an ongoing
dialogue with manufacturers to encourage this conversion process and an enhanced
programme to recover CHEP pallets from pallet recyclers in the US.

Although there are encouraging early signs of success from these efforts it
would be realistic to assume that a number of pallets are likely to have 'leaked
' from the pool.  In order to reduce the attendant financial risk, some 3.8
million pallets that are proving slow to return have been written down to a
nominal value at a cost of £18.5 million (A$52.8 million) in the half year

Looking forward, it is in CHEP's interest that a proportion of deliveries to
non-participating distributors continue as the business grows.  These deliveries
will however be made in a measured way and at appropriate prices to ensure that
CHEP's overall return on related contracts is satisfactory.

In order to standardise future loss provisioning policies globally, provisioning
will be based on physical audits and statistical sampling resulting from
collection data in each CHEP territory. The estimated annual impact of aligning
loss provisioning in future years will be an incremental annual charge of around
£9.0 million (A$25.7 million).  This estimate is set at a level sufficient to
ensure that possible pallet leakage is contained within it.

In this context, although lost pallets are normally the subject of claims for
compensation from customers it is more prudent not to include this factor in the
calculation of loss provisioning. An accrual of £7.3 million (A$20.8 million)
for possible compensations previously in the loss calculation has therefore been
written off in the half year, and will be excluded from future calculations.
This does not reflect any change of CHEP's policy of always seeking compensation
for the loss of its pallets and actual compensations will be taken into account
when they are received.


The net effect of the changes in depreciation and loss provisioning policies is
reflected in an exceptional charge before tax of £22.9 million (A$65.3 million)
in the interim results.

This will be reduced during the balance of the financial year as the benefits of
the depreciation change feed through.  The net charge before tax for the full
year will be of the order of £10.0 million (A$28.5 million).  The effect on the
interim results is shown below.
                                                                                  6 months to

                                                                                  31 Dec 2001

Recurrent Change                                                           £m                  A$m

Reduction in depreciation following adoption of                           15.9                45.4
25% residual value

Accelerated depreciation on US stringer                                   (2.5)               (7.1)

One Off

Write off damaged stringer pallets                                       (10.5)              (30.0)

Write-down of pallets in NPD locations                                   (18.5)              (52.8)

Accrual for compensations written off                                     (7.3)              (20.8)

Total Effect of Accounting Changes                                       (22.9)              (65.3)

Estimated effect for the full year                                       (10.0)              (28.5)
to 30 June, 2002

Whilst the overall impact of these changes on earnings in the year to June 2002
will be slightly negative, in subsequent years the effect on profits and
earnings, though not cash, will be positive after taking account of the future
loss provisioning policy.

                                                                    Appendix III


Bob Moore, CEO CHEP International, will be retiring from Brambles on 27 February
2002. Bob joined CHEP USA in 1995 and took full responsibility for CHEP
International in April 1999.

Since 1995, CHEP USA has grown its sales six fold from US$100 million to US$600
million last year and has established the leading market position that it has

To effect a smooth transition, Bob will continue to work with Brambles in a
consultancy capacity until the end of June 2002.

With immediate effect, Victor Mendes will replace Bob as CEO, CHEP
International, responsible for CHEP globally and reporting to C.K. Chow,
(Brambles CEO).

Victor joined Brambles in 1999 and has successfully developed Recall into a
leading and fast growing global information management business. Victor has
degrees in Engineering from the Universities of Brasilia and Tokyo.

Prior to joining Brambles, Victor worked for General Electric and held a number
of senior positions in their industrial automation business.

With immediate effect, Al Trujillo currently President, Recall Americas, will
succeed Victor as CEO Recall Corporation.  Al graduated from Georgia Institute
of Technology in 1981 and later obtained MS and MBA degrees from Stanford

After a career with Lockheed Missiles and Space Co. and American NuKEM, Al
joined Brambles in 1996. He moved to Recall's Atlanta headquarters in 2000 to
take up his current position.

Al has played a key role in the successful deployment of Recall Corporation and
delivered outstanding results for the Americas.

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