REG - CMO Group PLC - Half Year Trading Update

CMOAnnouncement

03/08/2023 07:00

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RNS Number : 1241I  CMO Group PLC  03 August 2023

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

 

 

 Enquiries:

 CMO Group PLC                                             Via Instinctif
 Dean Murray, CEO
 Jonathan Lamb, CFO

 Liberum Capital Limited (Nominated Adviser & Broker)      Tel: +44 20 3100 2000
 Andrew Godber
 Lauren Kettle
 Cara Murphy

 Instinctif Partners (Financial PR)                        Tel: +44 20 7457 2020
 Justine Warren
 Matthew Smallwood
 Joe Quinlan

 

 

 

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