The Breville Group Ltd (ASX: BRG) share price is one to watch after the Aussie home appliance maker reported its full-year earnings for the year ended 30 June 2021 (FY21).
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Breville share price in focus after slashing dividend
The Breville share price will be in the spotlight today after the company reported the following:
- Record group sales resulting in a 24.7% increase in revenue to $1,187.7 million.
- Gross profit up 29.0% to $413.7 million.
- Earnings before interest, tax, depreciation and amortisation (EBITDA) up 36.0% to $163.3 million.
- Net profit after tax up 42.3% to $91.0 million.
- Dividends per share down 35.4% to 26.5 cents per share (FY20: 41.0 cents per share).
It will be interesting to see how Breville shares respond as investors weigh up lower dividends against the stronger earnings figures.
What happened for Breville in FY21?
Breville reported strong demand for its products across all geographies and product ranges. Despite rising costs during the year, Breville's gross margin increased thanks to the product mix and low promotional spend.
Working capital remains "below equilibrium" as the company faced supply chain disruption from incidents at the Yantian International Container Terminal and Suez Canal during the year.
The Breville share price will be one to watch in early trade as the company reported a number of "Acceleration Program milestones" in FY21. Those include revenue exceeding $1 billion as well as Europe, Middle East and Africa (EMEA) now a bigger segment than Asia-Pacific and Mainland Europe now bigger than the UK.
The group also finalised the acquisition of USA-based coffee machine manufacturer Baratza in September 2020 which is reportedly performing above expectations.
What did management say?
Breville Group CEO Jim Clayton commented on the company's performance:
A fairly remarkable year for the Group with accelerated demand experienced in the first half carrying through to the second half. Increased consumer demand, driven by the need/requirement to work from home, coupled with our continued geographic expansion, outweighed logistical challenges and a weakening USD.
Constant currency Global Product sales grew by 37% over a strong prior year. All regions and categories delivered good growth despite experiencing very different and often erratic retail and supply chain environments.
What's next for Breville?
The Breville share price could be on the move today following the company's strong headline growth figures. Breville noted the "significant" rebuild of working capital was planned for FY22 with "adequate" debt facilities in place.
The Aussie manufacturer slashed its dividend which is another reason to watch shares in early trade. The decision to cut the final dividend from 20.5 cents, 60% franked to 13.5 cents, 100% franked comes after a change in dividend policy.
Breville has previously announced a reduction in its target payout ratio from 70% of earnings per share to 40% on a full-year basis.
How has the Breville share price been performing?
The Breville share price has climbed 28.9% higher in 2021 after hitting a new all-time high on Monday. Over the past 12 months, the company's shares have also gained almost 30%
