Breville Group Ltd’s share price jumps 11%: Is there room to run?

Breville Group Ltd’s (ASX: BRG) shares have soared to within a whisker of the stocks all-time high of $9.23 on Thursday, after the company released a set of half-yearly results which were applauded by investors. The stock has now gained around 54% in the past 12 months.

The kitchen appliance maker reported an impressive 17.7% growth in revenues to $311.3 million while net profit after tax dropped 1.6% to $31.2 million on account of the loss of the Keurig distribution agreement. The Keurig issue had been well flagged to the market leaving investors to focus on the significant sales momentum in the business.

This momentum saw sales in Australian and New Zealand grow 10.4%, in North America by 15.2% (in constant currency), and in the Rest of World (ROW) division by 69.1%.

Breville shareholder and billionaire, Solomon Lew, is also chairman of apparel group Premier Investments Limited (ASX: PMV) and a “little bit” richer today thanks to his 30.2% stake. Meanwhile shareholders in GUD Holdings Limited (ASX: GUD), which owns the Sunbeam brand of appliances, will once again collectively be shaking their heads at their company’s decision to sell its stake in Breville after an attempt to acquire the company was quashed by a Australian Competition and Consumer Commission (ACCC) in 2009.

Foolish takeaway

Boasting a return on equity of 22.6%, a fully franked interim dividend of 14 cents per share and significant scope to further grow sales in the North American, UK and rest of world markets, Breville’s stock could easily continue to enjoy investors’ favour.

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Motley Fool contributor Tim McArthur does not own shares in any of the companies mentioned in this article.

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