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BRG

Breville Group Ltd - FY19 Annual Results.

Jordan Baird

Jordan Baird is the head ASR Wealth Advisers client services desk and has been with the organisation since 2017. He first started investing in his early years. While he believes that investors should leave no stone unturned he has a particular interest in trading based on broad macroeconomic trends along with specific analysis of innovative up-and-coming companies.

Breville Group Ltd (ASX: BRG) is a home appliance company based in Australia but engaging in multinational operations.

breville group

What are the results from Breville FY19?

Today (Thursday 15th of August 2019) Breville released its FY19 annual results. The main points are as follows:

  • Revenue for FY19 is A$760 million, up by 17.5% from FY18
  • EBITDA for FY19 is A$114 million, up 13.7% from FY18
  • NPAT for FY19 is A$67.4 million, up 15.2% compared with reported FY18 NPAT.
  • The final dividend is 18.5 cents per share (partially franked). Thus, the total dividend for FY19 is 37 cents per share, an increase of 12.1% from FY18.
  • Basic EPS for FY19 is 51.8 cents, up 15.2% from FY18

Specific results on Global company operations are as follows:

  • Revenue from North America (NA) for FY19 is A$357.4 million, up 19.6 per cent (12.8% in constant currency) from FY18.
  • Revenue from Australia and New Zealand (ANZ) for FY19 is A$132.9 million, up 7.2 per cent (7% in constant currency) from FY18.
  • Revenue from Europe for FY19 is A$89.6 million, up 42.1 per cent (35.1% in constant currency) from FY18.
  • Revenue from, Rest of World for FY19 is A$32.1 million, down 11.4 per cent (17.7% in constant currency) from FY18

 

What were the drivers of this result?

Major drivers of this result include successful geographic expansion, particularly in the European markets of Germany, Austria, Benelux and Switzerland. Increases in marketing and R&D expenditure, and increasing return on organic investment.

The NPAT increase of 15.2% is positively affected by a one-off reduction in the Group’s US deferred tax asset in the PCP.

Strong performances in the US market was a key driver for FY19 results, mainly driven by success from beverages and juicing segments.

The sole negative result for FY19 was from the ROW segment, due to the Russian partner reducing purchases in the face of a much weaker Ruble. Excluding this Russia impact, Global constant currency growth was up 14.2% as all key regions performed well.

 

What is the outlook for Breville?

Breville will look to further expand their global operations in FY20 into Spain and France. This will further leverage the now established European warehousing, logistics, customer service and back-office functions. Additionally, many Spanish and French retailers are already customers.

Breville will look to expand their already centralised scalable global platform in FY20 by including a third-party logistics model in all geographies, a product information management (PIM) system to centralize all product-related data, a middleware platform improving flexibility and scalability and, a point of sale module giving access to sell-out data for better decision making

 

What is the market reaction?

The initial market reaction to Breville FY19 results is slightly negative. The current share price is trading at A$18.98 which represents a 2.06% decrease (10:54 am AEST).

 


 

Disclaimer:

This article has been prepared by the Australian Stock Report Pty Ltd (AFSL: 301 682. ABN: 94 106 863 978) (“ASR”). ASR is part of Amalgamated Australian Investment Group Limited (AAIG) (ABN: 81 140 208 288 Level 13, 130 Pitt Street, Sydney NSW 2000).

This article is provided for informational purpose only and does not purport to contain all matters relevant to any particular investment or financial instrument. Any market commentary in this communication is not intended to constitute “research” as defined by applicable regulations. Whilst information published on or accessed via this website is believed to be reliable, as far as permitted by law we make no representations as to its ongoing availability, accuracy or completeness. Any quotes or prices used herein are current at the time of preparation. This document and its contents are proprietary information and products of our firm and may not be reproduced or otherwise disseminated in whole or in part without our written consent unless required to by judicial or administrative proceeding. The ultimate decision to proceed with any transaction rests solely with you. We are not acting as your advisor in relation to any information contained herein. Any projections are estimates only and may not be realised in the future.

ASR has no position in any of the stocks mentioned.

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