Breville Posts 10.1% Revenue Growth and 16.1% Profit Rise in 1H25

Solid Half-Year Performance Amid Consumer Resilience

Breville Group Limited (ASX: BRG) has reported a strong half-year result for the six months ended 31 December 2024, showcasing resilience in consumer demand despite ongoing macroeconomic pressures. The company posted a 10.1% increase in revenue to AUD 997.5 million, underpinned by double-digit growth across its Global Product segment and particularly robust performance in the coffee category.

CEO Jim Clayton highlighted the strength of new product launches and geographic expansion as key growth drivers. "All three Theatres achieved double-digit revenue growth in constant currency, led by coffee," Clayton said, noting that cooking products also performed well while food preparation experienced a modest decline.

Margin Stability and Strategic Inventory Management

Despite elevated shipping costs in the EMEA region and a strong US dollar impacting product costs, Breville maintained a steady gross margin of 36.7%. Gross profit rose 10.3% to AUD 366.3 million, with operating expenses growing in line with gross profit, resulting in a 10.5% increase in EBIT to AUD 144.8 million.

The company tactically pulled forward inventory for the US market as a hedge against potential tariffs, increasing net working capital by AUD 55 million. This inventory build, while increasing short-term stock levels, is expected to protect margins in the second half of FY25.

Financial Health and Dividend Confidence

Breville’s net profit after tax surged 16.1% to AUD 97.5 million, benefiting from lower interest expenses due to strong prior cash flow generation. Net debt was reduced to AUD 55.1 million from AUD 97.5 million a year earlier, reflecting disciplined cash management and operational efficiency.

The board declared an interim dividend of 18.0 cents per share, fully franked, up from 16.0 cents in the prior corresponding period, signaling confidence in the company’s ongoing cash flow and profitability.

Outlook Amid Uncertainties

Looking ahead, Breville expects FY25 EBIT growth between 5% and 10%, navigating a complex landscape of macroeconomic uncertainties and evolving US trade policies. The company is actively relocating 120v production out of China to mitigate tariff risks and is expanding into new markets including the Middle East and China.

With a strong pipeline of new product developments and a conservative leverage ratio of 0.2x EBITDA, Breville is well-positioned to invest in growth opportunities while managing cost pressures and supply chain challenges.