Working from Home Conducive to Breville's Products, but Shares Overcooked

We maintain our AUD 16.50 fair value estimate for shares in Breville following the release of fiscal 2020 results which were broadly in line with our forecasts. The company's revenue continues to grow strongly despite shutdowns of many retailers in key markets in the second half. Breville increased fiscal 2020 sales by 25% to AUD 959 million, marginally ahead of our prior forecast of AUD 932 million. In markets with more severe lockdowns, online shopping is the only option, and customers have gravitated towards known and trusted brands, illustrating the strength of the Breville and Sage brands which underpin a narrow economic moat. Our forecasts now include the impact of the new accounting standard for leases, AASB 16. The firm declared a final dividend of AUD 20.5 cents, bringing full-year distributions to AUD 41 cents, 60% franked.