BBQ maker Shriro thanks Heston Blumenthal for a solid year – but warns costs will rise
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Gourmet kitchen appliance and gadget seller Shriro has celebrity chef Heston Blumenthal to thank for increases in revenue and profit over the past year.
The stock — which listed at $1 in mid-2015 after raising $50 million — hit an all-time high of $1.75 earlier this year. The shares have since cooled to $1.34 amid expectations of rising costs this year, however.
Profit was up 10 per cent to $14.5 million for the year to December and revenue edged up 3 per cent to $188 million.
At Thursday’s AGM the group highlighted its deal with celebrity chef Heston Blumenthal to create a BBQ line.
The chef’s “Endure” BBQ had been launched to positive feedback in US and Germany and would continue into international markets in the year to come — focusing on the slow cooking market which it says is a growing trend in the US.
“Shriro’s focus on product and market development will continue to underwrite longer-term growth, but will affect 2018 growth,” it told the market in its latest presentation.
However marketing spend would increase in the year ahead (Heston’s about to embark on a US promo tour) and that would impact profit, shareholders were told.
“It will be necessary to invest in significant marketing programs in the northern hemisphere where benefits may take a little time to fully emerge,” the group told investors.
“As a result CY18’s NPAT [calendar year 2018’s net profit after tax] is currently expected to be below CY17 due to a highly competitive market environment and investments for global expansion, in particular launches for the US and German markets.”
That’s had an impact on the stock (ASX:SHM) which has dropped 22 per cent since its January high.
Shriro is planning international expansion into France, Italy and Russia this year and Asia in the years to come.
Chair John Ingram — who also heads up ASX-listed furniture maker Nick Scali — told the AGM the BBQ line was evidence of the company’s ability in product development. New products were planned for introduction this year and at least 15 per cent of revenue would come from exports in the next five years.
But it would come at a cost.
“First quarter revenue [was] below expectation, mainly in appliances. However due to significant seasonality the first quarter is always Shriro’s lowest,” it said.
Online competitors were cutting its retail margins in the retail sector but a refresh of its oven businesses Omega and Blanco would help.