Shares in appliance maker and distributor Breville Group jumped more than 17% yesterday after the company revealed a very solid performance for the six months to the end of December and gave shareholders a nice boost.
Breville reported a 20% jump in interim profit to $43.5 million and the interim dividend was lifted 12.1% to 18.5 cents a share.
The shares finished a strong day up 18% at $14.09, the best performer on the ASX 200.
Revenue for the half jumped 15% to $440.4 million and the company saw a 12.9% rise in earnings before tax and interest (EBIT) to $62.5 million.
Directors also slightly upgraded the full year outlook, forecasting earnings before interest and tax “be slightly higher than the market’s current consensus forecast of ~11%.”
Sales in Europe popped 32% as the company moved into Germany and Austria for the first time in the half. North American sales were up 7.1%, while Australia and New Zealand grew by 7.6% in a retail market that is supposed to be in the doldrums.
“The Global Product segment revenue grew by +14.8% to $356.1m (1H18: $310.1m). In constant currency, revenue grew +9.2% for the half year. It should be noted that 1H18 was a strong, NPD-led growth half (+20% in constant currency), whilst 2019 innovation is back half weighted,” directors said in yesterday’s report.
“Against this strong comparator, the global segment growth of +9.2% constant currency was driven by double-digit growth in the key markets of the USA, Australia and the UK, as well as the positive impact of geographic expansion in Germany and Austria.
“In North America, we achieved double-digit constant currency sales growth in the US, with strong performances across beverage and juicing. Overall, NA growth was moderated by a softer performance in Canada, which faced the same comparator headwinds, but also saw some major retailers reducing inventories. Encouragingly, sell out remained solid across the half.
In ANZ we also achieved double-digit growth in Australia, a particularly strong result against a challenging retail environment. In New Zealand, we experienced a softer market and a deliberate transition to a higher margin business model.
“In Europe, the UK continues to grow strongly, comfortably delivering double-digit growth, and, when combined with the change of business model in Germany and Austria, the European region delivered 32% cc revenue growth or a third of the global product segment’s total growth, Breville said.