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AAP
AAP
Business
Steven Deare

Breville lifts FY profit but payout drops

Kitchen appliances distributor Breville improved full-year profit but lowered its final dividend. (AAP)

Home-makers stuck in lockdowns have helped Breville raise full-year profit by 42 per cent but an analyst questioned whether sales will ease when the coronavirus does.

People around the world bought more coffee machines, microwaves and the like during the pandemic and boosted the vendor's bottom line. Net profit after tax was $91 million.

Chief executive Jim Clayton said expanding to more European nations helped offset the impact of a falling US dollar.

Breville makes most of its money in North America but also trades across the Asia Pacific region and Europe.

In Australia, the company's brands include Kambrook and Nespresso.

Morgans senior analyst Alex Mees said the challenges ahead included the possibility of consumer demand "normalising" for these sorts of products.

Breville on Tuesday said its products had proved relevant to many people working from home around the world.

However, the prospect of more people returning to offices - particularly in Europe and the US - could weaken demand.

Breville cut its final dividend for shareholders despite its rousing profit. They will receive a fully franked final dividend of 13.5 cents per share, which is lower than the 20.5 cents per share paid last year.

A reduced payout was communicated earlier to investors.

The company will instead use net cash of $129.9 million for product development and marketing.

"They are reinvesting the benefits the past year has brought them," Mr Mees said.

"It gives them the chance to put blue water between them and the competition."

Mr Mees said while Breville met its earnings forecast, some investors might have been hoping the company would exceed it.

"Breville's earnings were absolutely in line with their guidance," he said.

"I think that might have disappointed a few people."

Shares on the ASX were down 8.58 per cent to $30.49 at 1537 AEST.

Australian retail magnate Solomon Lew's Premier Investments is the top shareholder in Breville and owns 26 per cent.

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