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- Australian kitchenware group, Breville (BRG) said that it has been immune from problems caused by the coronavirus outbreak
- The company said it does not have any manufacturing partners or part supplies in the Hubei Province, where the virus started
- China factories are coming back to production after the Chinese New Year and it has warned this will lead to a slow ramp-up to normal production
- However, its inventory levels at the start of the year are high enough to deal with the slowdown
- The company also reported a revenue increase of 25.4 per cent to $552 million for the first half of 2020
- Breville is up 17.5 per cent on the market today, selling shares for $23.48 apiece
Australian kitchenware group, Breville’s (BRG) share price is at an all-time high after it released its half-year financial year 2020 results.
Breville has had a pleasing first half with strong revenue growth and said that it has been immune from problems caused by the coronavirus outbreak.
The company said it does not have any manufacturing partners or part supplies in the Hubei Province, where the virus started.
It said that the China factories are coming back to production after the Chinese New Year and it has warned this will lead to a slow ramp-up to normal production.
However, its inventory levels at the start of the year are high enough to deal with the slowdown. The high inventory levels are due to Breville having excess stock for Brexit and the New Year holiday.
“In addition, each year we systemically buy forward a few weeks beyond CNY (Chinese New Year) as a hedge against a slower ramp-up post-holiday,” the company said.
“These higher inventory holdings are in effect a buffer for any slower post CNY production ramp-up,” it added.
The company reported a revenue increase of 25.4 per cent to $552 million, compared to last year’s $440.4 million.
Its earnings before tax jumped 15.6 per cent to $72 million, compared to $62.3 million from the first half of 2019.
Breville does majority of its trading in North America, but due to the U.S.-China trade war, the company focused on expanding in other markets such as Europe and the U.K.
This was a positive move for the company as revenue in its U.K. and European operations grew 63 per cent, to $83.7 million.
“The first half of FY20 was a solid half for the Group, continuing the trends seen over the last few reporting periods,” CEO Jim Clayton said
“We had good growth across all regions and categories and continued to deliver double-digit EBIT growth. Successful European expansion continued, diversifying our global footprint and adding growth and resilience to the portfolio,” he explained.
Breville is up 17.5 per cent on the market today, selling shares for $23.48 apiece at 12:22 pm AEDT.
