Breville Group (BRG) shares edged higher in yesterday’s sell-off, despite a slightly disappointing result for the year to June.
Full-year net profit fell 4.3% to $46.68 million on a 2.7% dip in revenue.
In fact the apparently weak result saw the shares down 10% at the opening on the news, but rebounded as the wider market fell to close a nervy day of trading up 2.9% at $6.90.
The company’s main brands are the range of Kambrook and Breville small appliances and Philips personal care products. It reported revenue fell to $527.04 million in the year ended June 30 from the year-earlier $541.62 million.
Earnings before interest, tax, depreciation and amortisation eased 1.2% lower to $77.02 million from $77.95 million.
Breville, which is 32% owned by Premier Investments (controlled by Solomon Lew), will pay a steady 13 cents a share final dividend. That made a full year payout of an unchanged 27 cents a share.
BRG 1Y – Breville profit down 4.3%
New CEO Jim Clayton, who took the top job on July 1, said the small appliance company had a tough second half in its Australian/New Zealand business as it implemented its new enterprise resource planning software system.
Mr Clayton said second-half earnings were hit by lower sales mostly in the entry to mid-price points in which the group’s Kambrook/Ronson brands operate, the new software system implementation in April/May, and foreign exchange fluctuations.
Sales in North America recovered in the second half supported by key categories, with revenue climbing 8.8% for the half year, but inching up only 1.4% for the full year to $203.1 million.
The company said it had continued success in the UK under the Sage brand with double digit revenue growth.
And together, the North America and the Rest of World segments grew as a percentage of group operating profit. The explanation for that was easy to find though – a weak effort in Australia and NZ markets.
In fact Australia and NZ saw a 6.5% slide in sales to $245 million for the full year, while earnings before interest and tax plunged 26.2% to $18.3 million.
Perhaps that is what spooked the market early on – it is really a weak performance in Breville’s biggest market.