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Breville just juiced profits, dividends, and ROE higher

This morning Breville Group Ltd (ASX: BRG) released its results for the financial year ending June 30, 2019. Below is a summary of the results with comparisons to the prior year. 

  • Revenue of $760m, up 17.5%
  • EBITDA of $114m, up 13.7%
  • Net profit $67.4m, up 15.2%
  • Final dividend up 12% to 18.5cps, full year dividends 37cps
  • Basic earnings per share of 51.8c
  • Return on equity 22.7%
  • Net cash position of $9.8m, compared to $58.9m in prior period

This is another strong result from the Sydney-based kitchen appliance group with revenue growth in North America and Europe particularly strong at 19.6% and 42% respectively. 

The group tends to focus on selling ‘premium’ products to households not so budget conscious as market-leading products can command big profit margins. 

As such its innovative new range of inter alia, coffee machines, juicers, kettles, microwaves, and food processors enjoyed a strong year of sales and at the premium end of the market there is constant opportunity to launch new products.

Check out its latest coffee machine below.

Source: Breville Presentation, Aug 15, 2019.

The stock recently hit a record high of $19.38 and is up around 125% over the past 5 years before dividends. Today it sells for $18.60 on 35x trailing earnings with a 2% trailing yield, which looks on the expensive side to me.

However, it looks a high quality operation with a decent balance sheet, return on equity, track record of growth and innovation.

It’s also majority owned by another high-quality retail operator in Premier Investments Limited (ASX: PMV).

Other good quality retailers to look at include Brett Blundy backed footwear retailer Accent Group Ltd (ASX: AX1), electronics retailer JB Hi-Fi Limited (ASX: JBH) and the fast-growing a2 Milk Company Ltd (ASX: A2m).

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Motley Fool contributor Tom Richardson owns shares of A2 Milk and Accent Group.

You can find Tom on Twitter @tommyr345

The Motley Fool Australia owns shares of and has recommended Premier Investments Limited. The Motley Fool Australia owns shares of A2 Milk. The Motley Fool Australia has recommended Accent Group. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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