Billionaire retailer Solomon Lew surprised yesterday by revealing his Premier Investments had not taken up his entitlement in the capital raising by global small appliance manufacturer Breville.
Breville completed the big shareholder part of its first-ever capital raising – a $104 million issue – on Thursday and revealed that Solomon Lew had not taken up his 32% of the institutional issue of $94 million.
That would have required Lew’s Premier Investments to put up around $30 million to avoid being diluted – the issue involved 4.7% of its issued capital, meaning premier’s stake falls to just over 30%.
The company said it had raised $94 million from major shareholders (the other $10 million will come from an issue to small shareholders) and in doing so revealed the non-take up by Mr Lew key public company, Premier (which also owns 11% Myer where it is losing millions of dollars).
Mr Lew and Premier Investments had said they were “highly supportive” of Breville’s raising and the company’s future growth initiatives.
That’s despite the company enjoying solid sales growth through the lockdowns and other disruptions caused by the COVID-19 pandemic – especially in key markets offshore.
It seems the ideas of lockdowns, social distancing, and catering cafe style food and beverages at home helped boost sales of coffee makers, sandwich presses, juice makers, slow cookers, and the like (The Shaver Shop had a similar story was well yesterday – see separate story).
Breville said in its update on Thursday that revenue from January to the end of April grew 32% to $266 million. That’s very solid growth at a time when retail sales are slumping globally.
Sales in March grew 25%, and in April grew 21%.
Shares were priced at $17, a 9.1% discount to the company’s $18.70 Tuesday close.
Investors who took up the issue made a motza yesterday with Breville shares rising nearly 6.8% to $19.55. That’s a gain of $2.55 a share in a day. Nice!
Breville notified investors on Thursday the institutional raise was completed and had generated “significant interest” from existing shareholders, with CEO Jim Clayton saying he was pleased with the strong showing of support.
“We see the success of the placement as a clear endorsement of Breville’s strong and resilient business and our long-term growth strategy, focusing on product development and international expansion,” he said.
Despite the buoyant sales, Breville says it will implement a number of cost savings measures, including reducing marketing expenses and has also refinanced $373 million in debt facilities with the ANZ and negotiated an extra $12 million of overdraft facilities.
