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Breville hits all time high on solid first half

Breville Group has closed at all-time highs after reporting an impressive set of half-year results which saw solid revenue growth in all regions and categories, supported by working from home and premiumisation trends. In a rollercoaster day of trading, the appliance manufacturer swung between $28.65 and $32.85, before closing the session at $31.35.

Double-digit EBIT growth of 29.6% and an NPAT increase of 29.2% were achieved thanks to improved gross margins driven by lower promotional spend, swings in the mix to premium products, and a weaker USD, which more than offset increased freight costs.

Revenue in the Global Product segment grew 34.0% to $592.9m (1H20: $442.6m), adding over $150m half-on-half. While the Distribution segment delivered an incremental $2.0m in EBIT, with double-digit sales growth in “Breville Local”, including the Breville Air range, and single-digit growth in Kambrook and Nespresso

Gross profits were tactically invested in digital improvements, product development, and IT capability.

The company declared a reduced interim dividend of 13.0 cents per share, fully franked to reduce its target payout ratio to allow continued funding of growth opportunities on a cash-neutral basis.

Commenting on the Group’s result, Breville Group CEO, Jim Clayton said: “A good half for the Group, building on the momentum seen over the last few reporting periods and benefiting from the WFH phenomenon. All regions and categories delivered growth, despite experiencing very different and erratic retail backdrops. We continued to accelerate our double-digit EBIT growth, while tactically investing in selected growth drivers and capabilities. Geographic expansion is delivering an increasingly diversified and balanced global portfolio, adding growth and resilience in a dynamic market environment.”

FY21 Outlook

Assuming no significant change in economic conditions in our major trading markets, Breville expects EBIT for the full year of FY21 to be approximately $136m, an increase from the guidance provided at the AGM ($128m-$132m). Investment in NPD & GTM as a percent of Net Sales is approaching the strategic goal of 12% and investment levels will be flexed in 2H 21 depending on the sales growth delivered.

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