Half Year Trading Update
CMO Group PLC
Half Year Trading Update (unaudited)
Progress on key strategic priorities and trading update
CMO Group PLC ("CMO" or the "Group"), the UK's largest online-only retailer of building materials, today announces an update on trading for the half year to 30 June 2023.
As reported in May, at the time of our preliminary results, we expected the economic situation to remain challenging and the timing of recovery in consumer confidence uncertain. In response, we laid out our key strategic priorities for 2023 which were to make cost reductions, improve margins, address carriage costs and adapt to current slower sales growth. We are pleased to report on progress to date and that, despite ongoing market volatility, the Board expects EBITDA to be in line with market expectations for the year of £2.5m, albeit with sales lower at c.£80m.
Our focus on driving profitable sales has been underpinned by:
§ Improvement in Product margins: Product margins excluding carriage have trended upwards in the first six months and improved by 2.2 percentage points compared to full year 2022.
§ Carriage Cost Control: We have seen a 55% improvement in carriage loss versus the first half 2022.
§ Overhead Efficiency: Overheads have reduced in accordance with our plan, including the headcount reductions announced for the first quarter.
Balance sheet: The Group continues to have a sound financial position with sufficient headroom in its facilities for its ongoing development. Net cash at the end of the period was £1.0m, a reduction since the year end of £0.4m. The movement includes the payment of deferred consideration of £1.0m offset by a benefit of c. £0.9m, following a temporary pause in the Group's VAT payments, as requested by HMRC, as it works to bring the Group together under one VAT registration. Cash on the balance sheet was £4.7m at the period end (FY2022 £6.2m), with drawn facilities of £3.7m (Y/E 2022 £4.6m).
Revenue: Sales in the first half of £36.9m represent a one year like-for-like decline of 12%, 15% up on pre-Covid like-for-like and representing an increase for the Group of 57% on a four-year view. We remain focused on continuing to drive profitable sales and with an underlying improvement in sales trend towards the end the end of H1 which has continued into July, we expect to see a return to sales growth in the second half of the year.
Trading: Across our business we have seen underlying robustness in our Trade customers with improved KPI's in revenue per session growing 15% YTD and the number of repeat customers up 21%. Our program to integrate JTM Plumbing and Clickbasin into PLUMBING SUPERSTORE and the integration of Total Tiles into TILE SUPERSTORE is progressing well.
Dean Murray, CEO of CMO Group PLC, said:
"We continue to forge ahead with our strategy to disrupt and build market share in the Building Materials market. The full integration of our two most recent acquisitions into PLUMBING SUPERSTORE and the launch of the GOOD BUILD SUPERSTORE mark further, great progress in our mission to provide our customers with everything they need to build or maintain a home, and I look forward to the launch of another exciting, specialised superstore in the coming months.
We have seen good progress on the strategic objectives and actions for 2023 outlined at the last results, which are delivering improved margins and, combined with overhead efficiencies, are expected to deliver improving profitability in the second half and full year results in line with our expectations."
3 August 2023
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Enquiries: |
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CMO Group PLC |
Via Instinctif |
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Dean Murray, CEO |
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Jonathan Lamb, CFO |
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Liberum Capital Limited (Nominated Adviser & Broker) |
Tel: +44 20 3100 2000 |
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Andrew Godber |
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Lauren Kettle |
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Cara Murphy |
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Instinctif Partners (Financial PR) |
Tel: +44 20 7457 2020 |
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Justine Warren |
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Matthew Smallwood |
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Joe Quinlan |
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