breville targets growth markets

Hi all, below is summary of Weekend AFR article on BRG by Sue Mitchell

Jack Lord chief is confident that growth in N America and venture into UK will eventually offset income lost when the Keurig partnership ends.

They will cease selling single-portion coffee machines in Canada in 3 mths. The estimate from Goldman Sachs is $19.5m commission income loss and $10m earnings - about 14% of the $71m it is forecast to earn this financial year.

This is hoped to be quickly offset by increase in mkt share in US and Aus and establishing foothold in UK. Lord says core business growth quite strongly, new product dev driving growth and expansion of international distribution business.

Negotiations in UK with John Lewis, Selfridges, Debenhams and House of Fraser, launching in UK in mid year. Strategy to be replicated in US under new brand endorsed by Heston Blumenthal.

UK small appliance mkt 2.5x Aus mkt, but limiting range and expecting to reach 25% of domestic sales.

In Aus to launch a range of Breville co-branded Nespresso machines - single promotion has tremendous growth.

Brand has endorsement of Sol Lew 30% shareholder, appointed Sally Herman as rep on board earlier this mth. Lew likes R&D and new strategy initiatives such as US entry, Blumenthal and Nespresso agreements.