Temple & Webster Narrows Loss
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Online furniture and homewares retailer Temple & Webster has dramatically reduced its half-year loss and forecast a return to full-year profit in 2018-19, proving there is life after at least two near death experiences in 2016 and 2017.
Shares in Temple & Webster rose as much as 10% to 55¢ on Tuesday after bottom-line losses shrank to just $890,000 in the six months ending December from $5.3 million in the first half of 2017 and $17.7 million in the same period two years ago.
The shares lost all those early gains and ended the day unchanged on 50 cents.
CEO Mark Coulter reckons the company is on track to break even in the current June half year and post its first year profit in 2018-19, based on sales reaching $79 million. Temple & Webster shares are worth less than half their October 2015 initial public offer price of $1.10, but the stock has risen more than three-fold over the past 12 months as investors punt that the country’s biggest online only furtiniture group is back on the rails.
The improvement came off the back of a tiny 1.2% rise in sales to $34.4 million, (thanks to solid demand for dining tables and chairs, beds, sofas and rugs).
But the company said that after closing its Milan Direct business in December 2016 and then locating it on the Temple & Webster website, sales were up by between 15% and 20%. The key to the improvement was a 17% or $3.2 million slice out of costs as the company cut head office staff, moved to a new distribution centre, struck better shipping rates and redirected its marketing spend towards more efficient channels.
Another bullish point - Mr Coulter said solid growth has continued into the second half with revenue up 21% from January 1 to February 15 compared to the same period a year ago.
Glenn Dyer has been a finance journalist and TV producer for more than 40 years. He has worked at Maxwell Newton Publications, Queensland Newspapers, AAP, The Australian Financial Review, The Nine Network and Crikey.
At the AFR he was a finance writer, Finance Editor, News Editor and Chief of Staff. At the Nine Network he was supervising producer of Business Sunday for more than 16 years. He has also written for other online and analogue print publications here and overseas.