The Breville Group Ltd (ASX: BRG) share price soared by 9% shortly after the market open on Wednesday, after the home appliances company reported its half-year earnings for the 2022 financial year (1H22).
The Breville share price is currently up 1.09% to $28.75 after closing at $28.45 yesterday. The shares hit $31 this morning before falling back.
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Breville share price up on solid first half update
- Revenues up 26.5% from $711 million in 1H21 to $878.7 million in 1H22
- Earnings before interest, tax, depreciation and amortisation (EBITDA) up 16.6% from $107.6 million to $125.5 million
- Earnings before interest and tax (EBIT) up 22.8% from $91.7 million to $112.5 million
- EBIT margin of 12.8%, down slightly from 12.9% in 1H21
- Net profit after tax (NPAT) up 25.1% from $62.1 million to $77.7 million
- Earnings per share (EPS) rose 23.7% from 45.1 cents to 55.8 cents
- Interim dividend of 15 cents per share, fully franked.
What else happened in the first half?
Breville experienced strong growth across all of its target markets over the half. Europe, Middle East and Africa revenue saw the most growth, rising by 39.4% to $201.1 million. Asia Pacific revenue was up 22% to $162.7 million. Americas revenue rose 17.1% to $370.1 million.
All three areas have now seen compounded annual growth of more than 20% since the 2019 financial year. Breville said its gross margins were affected by a "turbulent" environment and inflation headwinds, partially offset by price increases.
What did management say?
Here's some of what Breville CEO Jim Clayton had to say on these results:
Sustained consumer demand across geographies and categories underpinned our 1H22 performance. The business continued its move from strength to strength delivering 23.6% sales growth, despite a strong prior period and global logistical constraints (most acute in the US); double digit EBIT growth with continued investment in mid-term growth drivers; and, an improved inventory position, which we plan to further reinforce in the 2H to support growth in the 1H23.
What's next?
Going forward, Breville has told investors to expect EBIT for the full 2022 financial year to be "consistent with the market's current consensus forecast of ~$156 million". However, that assumes no significant change in economic conditions and no further supply chain disruptions "beyond what we experienced" in the first half.
Breville said that it is expecting inflationary pressures to continue, as well as supply chain constraints. The company also said that it would "begin building inventory for peak season FY23 to try to get ahead of ongoing logistical challenges".
Breville Group share price snapshot
Although the Breville share price had a strong open today, it remains down by 10.9% so far in 2022. It's also down by 7.9% over the past 12 months. Over the past 5 years, Breville shares have risen by a healthy 231%.
At the current Breville share price, this ASX 200 share has a market capitalisation of $3.96 billion, with a trailing dividend yield of 0.95%.
