Online furniture business Temple & Webster successfully completed a $40 million institutional placement to fund the business’ growth plans on Thursday, after seeing strong adoption of online shopping.
The proceeds from the placement, which saw the issue of 7 million new shares at a price of $5.70 per share, will be used to provide the business with financial flexibility to pursue its growth strategies, and to enhance its digital platform, products and service offerings – potentially through its own investments or acquisitions.
“We remain very excited about the position of Temple & Webster and our unique opportunity to capitalise on the structural shift from offline to online for furniture and homewares,” Temple & Webster chief executive Mark Coulter said.
“With the recent acceleration in this trend, we think it is financially prudent for the company to strengthen its balance sheet to provide us with the flexibility to make additional investment into our growth.”
Once such investment has being made already in an offshore AI start up, with Temple & Webster making a small investment and agreeing to bring its AI-driven interior designing tools to Australia in a market first.
The placement was allegedly significantly oversubscribed, seeing strong take up from existing shareholders as well as new investors, both domestic and international.
Chairman Stephen Heath said the placement will keep Temple & Webster well positioned to take advantage of the burgeoning online furniture market.
In the second half of the FY20 financial year Temple & Webster saw revenue grow 90 per cent, with EBITDA up 668 per cent to $7.1 million. Additionally, active customers and year-to-date revenue grew 68 per cent.
“We can already see in our numbers that many of the customers who have never shopped with us before, and may be first time online shoppers in our category, have already returned and made repeat purchases,” Coulter said. “Our strategy of being a category specialist, with a clear customer offering built around the largest range of furniture and homewares in the country, combined with the most inspirational content and the best customer service continues to resonate.”