Breville boilover claims CEO

The value of Solomon Lew‘s 30 per cent stake in appliance maker Breville has fallen as much as 18 per cent after a worse-than-expected drop in sales and earnings in North America claimed the job of chief executive Jack Lord.

Analysts said sales of juicers, which had more than doubled in the US in recent years, had run out of steam and big retailers had been destocking after weak retail sales earlier this year. "It was always going to be flattish result," said Moelis analyst Todd Guyot. "But I think the market has been too optimistic about the North American business - it’s grown very strongly over last few years … and some were extrapolating what they’ve done in the past.

Mr Fisher said Breville was becoming increasingly global and the board was determined to have the best leadership in place to deliver the company’s global growth strategy. "The board is particularly focused on further leveraging Breville’s infrastructure and know-how across all regions, with a view to maximising revenues and building efficiencies in every market Breville chooses to enter," he said.

Mr Lew has been gradually increasing his influence on the Breville board, appointing former Voyager Group chief executive Steven Fisher as chairman, while Premier Investments is now equity accounting its share of earnings.

Mr Lord, who had been at the helm for two years, left abruptly on Thursday after Breville reported a 1. 9 per cent fall in 2014 net profit to $48. 8 million on a11. 3 per cent rise in revenues to $541. 6 million.

However, Breville investors were spooked by a 39 per cent drop in earnings in the North American business in the second half, when Breville had largely completed its exit from the Keurig agreement.

Breville’s overall result was dragged down by the loss of its lucrative distribution agreement with coffee maker Keurig last year and was in line with market forecasts.

Nonetheless, Mr Guyot said Breville had just 10 per cent of an addressable market in North America worth $2 billion and there was plenty of room for growth.

Analysts said the share price weakness would make it cheaper for Mr Lew‘s Premier Investments, which owns 30 per cent, to take full control of Breville.

Read more here: SMH


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