UPDATE 2-Brambles H1 profit, upbeat outlook boosts shares

(Adds fund manager comments, details, updates shares)

By Sonali Paul

MELBOURNE, Feb 21 (Reuters) - Brambles Ltd (BXB.AX: Quote, Profile, Research, Stock Buzz), the world's biggest supplier of pallets, reported a 10 percent rise in first-half profit and said it expected solid sales and profit growth this year, sending its shares up as much as 8 percent.

Brambles' upbeat outlook, underpinned by U.S. demand for grocery products, reassured investors who had worried that economic downturns in the United States and Europe could pare demand for its CHEP pallets.

"It's just a good bit of relief that there weren't any nasty comments or numbers that we've had in other results," said Ken West, a partner at Perennial Growth Management.

The company said it expected profit growth to slow in the second half as it spent money to improve operations.

Brambles, which sold its Cleanaway UK arm last year to round off a major restructure, said it planned to invest $750 million over the next three years to expand in the U.S. food and drinks sectors and in Europe and China, and set up in India.

The investment was expected to generate new sales of about $600 million a year, it said.

July-December profit from continuing operations rose to $296.7 million from $270.6 million.