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Breville Shares Soar After $94M Placement

Kitchen appliance manufacturer, Breville Group, has seen its shares soar over 10% after the company successfully completed a $94 million fully underwritten institutional placement.

Proceeds of the placement will be used to enhance group financial flexibility and expand Internationally, amid what it claims has been strong sales throughout the coronavirus pandemic.

Despite robust performance, the group has engagement “prudent” actions to manage cashflow including cutting salaries and lowering marketing costs.

The institutional placement will comprise around 5.5. million new fully paid ordinary shares at a price of $17 per new share.

Shares in Breville were trading at $21.07 just before 11am.

Prominent shareholder and billionaire, Solomon Lew, reportedly did not engage in the company’s first-ever capital raise despite Breville remarking on the pleasing “demonstration of support” from existing shareholders and institutional investors.

“We see the success of the Placement as a clear endorsement of Breville’s strong and resilient business and our long-term growth strategy, focusing on product development and international expansion,” said Chief Executive, Jim Clayton.

The $94 million placement was joined by a $10 million underwritten share purchase plan, launching a $104 million raising.

From January to April the group announced 32% revenue growth, with growth notching 25% and 21% in March and April respectively.

Global product offered 32% revenue growth for the year to April 2020.

The company says results comes despite retailer closures in key locations amid the COVID19 shutdowns, with sell-through beating sell-in growth across all key regions – “demand remained strong and retailers ran down their inventory.”

The company has also received commitment from ANZ to finance and extend the maturity of existing debt facilities of $373 million to up to three years.

Breville Group specialises in small kitchen appliances, and is currently worth around $2.4 billion dollars after listing on the ASX in 1999.

The group entered a trading halt yesterday, and announced the equity raising after the market closed. 

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