Analysts at Morgan Stanley have backed Breville Group, predicting that the company will be able to capture a third ($3.1 billion) of the $10-billion global serviceable market by FY30.
“We estimate a global revenue opportunity of $10 billion, providing a long runway for organic growth relative to its current global product revenue base of $770 million,” analysts told the Australian Financial Review.
“We view BRG as being well positioned to manage near-term uncertainty with scope for opportunistic M&A and/or expanding dividends.”
In the first half of FY20 Breville’s revenues rose by 25.4% to total $552 million.
In June the company successfully completed its $10-million underwritten share purchase plan and in May it completed a fully underwritten $94 million placement to eligible institutional investors.
“The successful completion of our capital raise positions Breville to continue investing in growth including product development, marketing and the international expansion that has underpinned our accelerated EBIT growth over the last 5 years,” Jim Clayton, CEO of Breville, said at the time.
According to Morgan Stanley, increased spending on R&D could help strengthen Breville’s competitive advantage.
“As BRG scales, this will drive higher R&D and marketing spend, which in turn should drive accelerated revenue growth,” analysts stated.
