Online homewares and furniture retailer Temple & Webster has confirmed its earlier update of a sharp jump in earnings for the year to June, with more to come.
The online-only retailer said its earnings before interest, tax, depreciation, and amortisation (EBITDA) surged to $8.5 million for the year to June 30, a rise of 483% from the $1.5 million reported in 2018-19 when the company, after a major revamp, moved from loss-making into making profits.
Sales jumped 74% to $176.3 million with volumes doubling in the second half of the year as online shopping became the new normal in the pandemic.
Temple & Webster said the number of active customers grew 77% on last year to around 480,000, with around 140,000 of those first-time shoppers.
Its gross margin leapt from just 45 cents in the dollar to more than 78 cents, thanks to economies of scale on the big surge in turnover volumes. “Many customers are trying online shopping for their homes for the first time out of necessity,” CEO Mark Coulter said on Tuesday.
He pointed out that the results were especially strong considering the tough retail conditions. “The advantages of being the online market leader are apparent as we continue to grow our market share.”
For the first four weeks of the new financial year, trading has continued to be strong, with July’s sales growth in line with the 130% increase reported across the fourth quarter.
Cash on hand for the retailer was $38.1 million at the end of the financial year, which excludes the money from the $40 million capital raising earlier in July.
The company has not indicated what it hopes to use its cash reserves for, other than making additional investments in growth and a “small investment” in an unnamed offshore startup developing artificial intelligence interior design tools is the only expenditure noted by the business.
No mention of a dividend and the shares ended the day up 5.7% at $8.23. At that price it’s worth $937 million.
