Trading Statement for 27 weeks ended 30 June 2022
CMO Group Plc
("CMO" or "the Group")
Trading Statement for the 27 weeks ended 30 June 2022 (unaudited)
CMO Group PLC, the UK's largest online-only retailer of building materials, provides a trading update for the period ended 30 June 2022.
Current trading and outlook
The Group has continued to deliver strong revenue growth of 10% for the 27 weeks to 30 June 2022. One-year LFL* sales of 2 % (Superstores at 5 % and Total Tiles -10%) against particularly strong comparatives. Two-year LFL sales growth was 29 %.
However, CMO has not been immune to the well documented macro-economic and geo-political pressures, which have created conditions that have become more challenging since Easter. On the supply side CMO has experienced higher carriage costs and supplementary product price charges. All other metrics such as basket size, spend per head and conversion have remained consistent, albeit the Group is seeing a slight shift in mix with higher conversion rates in lower margin product ranges. The impact of these factors has been to soften margin performance in the short term, and the Group has taken actions to limit the future impact on margin.
Given the trading challenges outlined above, which are anticipated to continue through H2 and into H1 2023, the Board has now taken a more cautious near-term outlook and expects to see less strong growth in the short term. Guidance for the year is updated to reflect the potential continuation of market disruption, with revenue for the year expected to grow from £76.3m in 2021 to not less than £86m, and adjusted EBITDA** to be similar to FY2021. (2021: EBITDA £3.7m).
During Q1 and Q2 CMO continued to grow market share with marketing spend remaining in-line with expectations.
The Group is focussed on operational delivery to mitigate the additional macro and supply side cost headwinds, with improvement realised from weeks 24 onwards.
Strategic update
The Group has made good progress against its previously stated strategic goal to provide customers with everything they need to build or maintain a home, through a simple, convenient, and supported shopping experience.
PlumbingSuperstore.co.uk was launched at the end of Q2 following the complementary acquisition of Click Basin, which, along with the acquisition of JTM Plumbing in October 2021, gives the Group access to the c£800m online plumbing and heating market.
Additional strategic growth projects are on target including brand evolution roll out in Q3, a homeowner project store in Q4, and development of a new superstore vertical which is due to launch in Spring 2023.
CMO enters H2 with a strong proposition to continue to disrupt the traditional market and the Board is confident that CMO will deliver further growth in the years to come.
*Excludes carriage.
**Adjusted EBITDA is defined as earnings before interest, tax, depreciation, amortisation, exceptional and acquisition costs.
Dean Murray, CEO of CMO Group PLC, said:
"We have had another good period of strong sales growth during a particularly volatile trading period. However, unsurprisingly, the macro-economic picture and the geo-political situation which has exacerbated supply side challenges have had a short term impact on profitability. Despite this, we have moved with agility to address these challenges and remain confident in the outlook for the Group. We are focussed on managing the operational headwinds, already seeing positive signs as we enter H2, whilst continuing to deliver our strategic plan to enable future growth.
"Our ambition remains undimmed and our strategy to continue to increase on-line penetration of the building materials market remains on track."
The information contained within this announcement is deemed by the Group to constitute inside information as stipulated under the Market Abuse Regulation (EU) No. 596/2014 as it forms part of UK domestic law by virtue of the European Union (Withdrawal) Act 2018.
13 July 2022
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 |
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Matthew Smallwood |
Tel: +44 20 7457 2005 |
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Justine Warren |
Tel: +44 20 7457 2010 |
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