Breville Group’s Stock Zoomed Up By 18% On Posting 12.9% Jump In EBIT for 1H FY2019.

Breville Group Limited (ASX: BRG), a company from the retailing industry group and engaged in designing, developing, marketing and distributing small electrical appliances in more than 50 countries around the world including Australia, New Zealand, Canada, USA, UK and Germany, announced its half-yearly results for the fiscal year 2019, ended 31 December 2018.

The half-year period ended 31 December 2018, reported a robust growth across the business and the geographical expansion of the company which increased the Group’s revenue by 15.4%. The EBIT increased by 12.9% as compared to the previous corresponding period. The EBIT margin remained steady during the period. The net profit after tax increased by 19.7% as compared to 1H FY2018. As a result, the EPS also increased by 19.7%. The company declared an interim dividend of 18.5 cents per share which is 60% franked. 

By the end of 1H FY2019, the global product segment revenue in North America was A$214.9 million, up by 14.2% as compared to pcp. In Australia and New Zealand (ANZ), the global product segment generated revenue worth A$74.1 million, up by 7.6% as compared to pcp. The European business of the company delivered a solid start to a new go-to-market approach, where the performance of the UK was excellent. From Europe, the global product segment generated revenue worth A$51.4 million which increased by 32% during the period as compared to pcp. Other than these countries, there was a fall in the revenue from the global product segment by 11.2%. Overall, the total increase in the revenue from the global product segment was 9.2%.

During the period, the company used A$18 million working capital to enter into Germany and Austria and considered stock build pre-US tariff and Brexit, with inventory turns of approximately 4.0x. There were strong sales in December in the US, which increased receivables alongside general business growth.

The presentation also covers the Benelux & Switzerland update where Country-level teams and partners are in place. The EU-wide packaging has been completed, logistics and service infrastructure are all set, with incremental inventory on the water. In Switzerland, the website, content and point-of-sale are already live. In the second half of FY2019, the company is ready to launch Creatista® in Benelux and 1H FY2020 in Switzerland. The upcoming plan of the company is to launch Sage into Spain in 1H FY2020.

By the end of 1H FY2019, there was an increase in the net asset by 12.37% as compared to 1H FY2018. The balance sheet highlighted that the company since 1H FY2018 have grown in terms of net asset. The total shareholders’ equity is worth A$309.615 million. By the end of the 1H FY2019, there was a decrease in the net cash and cash equivalent to A$66.158 million due to increased cash outflow through operating activities.

In the last six months, the stock has generated a positive return of 8.25%. By the closure of the trading on 14 February 2019, the closing price of the stock at A$14.090 was up by 18.007% as compared to previous trading day’s closing price. The stock has the market capitalization of A$1.55 billion and a PE ratio of 26.53x.


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