CMO: Continued Strong Growth And Forecasts Met, Despite Headwinds

CMO Group Plc, the UK's largest online-only retailer of building materials, today [6th May] announces its Preliminary Results for the year ended 31 December 2021.  

Our mission is to offer our customers everything they need to build and improve a home through the widest range at the right value and right time, with helpful people and effortless, inspirational e-commerce. We continue on our journey to deliver this through our strategy of acquiring or building new specialist websites and expanding current ranges. 

With over 100,000 SKU's and 8 specialist websites, CMO has the leading product range which drives organic category authority. This, together with the unique dropship model for delivery is providing a different experience for its customers and revolutionising the shopping experience. 

Financial and Trading Highlights

• Revenue increased by 46% to £76.3m (2020: £52.4m), reflecting strong organic growth, a £16.5m contribution from the acquisition of Total Tiles and the addition of £1.7m from three months of JTM, acquired last September.
  
  
• H2 revenue increased by 33% to £38m despite supply chain and COVID 19 disruption. Opportunity cost of disruption estimated at 5% of sales.
  
  
• Online superstores LFL sales of 12% (over two year 30%) and Total Tiles LFL at 10%
  
  
• Market share grew by 11% year on year, faster than the wider builders merchant market, which itself grew by 28%.
  
  
• Adjusted EBITDA increased to £3.7m (2020: £2.6m) *
  
  
• Adjusted earnings per share was 2.28p (2020 loss 0.71p) *
  
  
• After exceptional costs of £5.8m relating primarily to IPO costs, fair value and tax charges on the share issue, loss before tax was £4.4m (2020: £0.8m loss) 
  
  
• Net cash on the balance sheet of £6m at year end.

Operational Metrics and highlights

• Completion of successful IPO on AIM and continue execution of successful strategy
  
  
• Active customers increased to 182,000 from 127,000 in 2020 following higher search demand.
  
  
• Over 50% of sales from repeat orders
  
  
• Digital marketing costs remain at less than 5% of sales, database grew by 30%
  
  
• Average order value grew by 10% to £274
  
  
• JTM Plumbing has performed in line with expectations and will be integrated into Plumbingsuperstore.co.uk which launches later this year.

Current Trading

• Current trading for Q1 2022 has remained strong despite well documented difficult conditions.
  o  Total sales growth of 13% (incl. JTM)
  o  LFL** sales of +3% with superstores at +8% and Total Tiles, against very strong comparatives, -11%

• 2 year LFL group sales growth of 49% and Total Tiles 63%

** Excludes carriage

Outlook

• CMO's market remains buoyant and the Group, despite macro-economic headwinds, continues to cope well and thrive
  
  
• Our market share continues to grow with modern tradespeople and homeowners continuing to seek the convenience of the online experience and our unique dropship model.
  
  
• Focussed on driving profitable sales growth and confident of delivering shareholder value in the short, medium, and long term

*Adjusted EBITDA is defined as earnings before interest, tax, depreciation and amortisation, share option expense, acquisition costs and exceptional items. 

Dean Murray, CEO said:

"CMO's strategic goal is to provide our customers with everything they need to build and maintain their home.

We have enjoyed further success over the last year achieving sales, margin and profit growth whilst expanding our range of products. We have and continue to experience strong demand driven by both the marketplace and our strong proposition to the internet savvy tradespeople and homeowner of today.

We have weathered the supply disruption of 2021 and the difficulties caused by COVID 19, and our flexible model means we are managing well the current macro-economic issues.

We continue to pursue a pipeline of acquisitions in conjunction with organic growth to add specialist verticals as demonstrated with the launch of plumbing superstore in Q3, and the launch of the homeowner project store in Q4.

Trading for the first quarter of 2022 has remained strong and the Board is confident that CMO will deliver continued growth in the year to come."

Chairman's statement 

After last July's very successful admission to AIM, the team has risen to the challenge of CMO's new status and, despite some challenging headwinds, has delivered another strong performance.  Full year revenue and adjusted EBITDA* are both in line with expectation, and the well-publicised supply chain and logistics difficulties having been expertly negotiated.  These challenges, coming on top of two unpredictable years of pandemic-related lockdowns, have demonstrated the robustness of the model and the team.       

CMO's strategy to provide customers with a comprehensive range of building materials through specialist, contact centre supported websites, has once again proved to be the right one.  It's clear the retail world focussed even more strongly towards online during the pandemic, but people still like dealing with people.  CMO will always make sure its customers can do just that.  This model continues to work for us with like-for-like sales up in 2021 by 12% and two-year sales by 30%.  

The team is also marching on with the strategy to provide customers with everything needed to build a home.  We've filled the plumbing gap with the purchase of JTM Plumbing Ltd at the end of September 2021 and we've been the proud owners of Total Tiles Ltd for exactly 12 months at the balance date.  These two businesses, which perfectly fit our profile and are continuing to perform well, have led to overall growth for 2021 of 46%.      

View the full year results presentation here.

Source : CMO

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