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Temple & Webster losses narrow

TempleandWebstermarkcoulterOnline homewares retailer Temple & Webster has narrowed losses and met its top-line revenue guidance, signalling its intention to return a profit in FY19 amid strengthening sales in 2H17.

A net loss before tax of $7.8 million was recorded for the year ended 30 June, a $37 million improvement on the prior year, on a 75 per cent improvement in earnings before interest, tax, amortisation and depreciation (EBITDA) to a $1.8 million loss in the second half.

Revenue growth of 11 per cent to $64.5 million drove the earnings improvement, alongside a 19 per cent increase in gross margin from Australian operations, adding $27.5 million to the books.

Cost of sales declined 2.6 per cent during the year on an improvement in marketing spend as a percentage of revenue and better operating leverage.

The margin improvement has left the furniture retailer’s CEO Mark Coulter with $8.7 million in the kitty, heading into FY18, with no outstanding debt.

“We had a great finish to the 2017 financial year,” Coulter said. “Q4 was the Group’s first cashflow positive quarter and the strongest quarter in our turnaround journey to date.”

“We continue to remain confident of reaching profitability during FY18 with FY19 being our first full year of profit. Given we have entered FY18 with a significantly reduced cash burn and a strong balance sheet, we are also comfortable that we have the existing cash reserves to meet our current plans.”

During the year the Group integrated the Milan Direct site under the Temples & Webster banner, simplifying its marketing strategy to enable revenue and margin growth.

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