REG - CMO Group PLC - Trading Statement for 27 weeks ended 30 June 2022

CMOAnnouncement

13/07/2022 07:00

For best results when printing this announcement, please click on link below:
http://newsfile.refinitiv.com/getnewsfile/v1/story?guid=urn:newsml:reuters.com:20220713:nRSM2504Sa&default-theme=true

RNS Number : 2504S  CMO Group PLC  13 July 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:

 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
 Matthew Smallwood                                         Tel: +44 20 7457 2005
 Justine Warren                                            Tel: +44 20 7457 2010

 

 

 

This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact
rns@lseg.com (mailto:rns@lseg.com)
 or visit
www.rns.com (http://www.rns.com/)
.

RNS may use your IP address to confirm compliance with the terms and conditions, to analyse how you engage with the information contained in this communication, and to share such analysis on an anonymised basis with others as part of our commercial services. For further information about how RNS and the London Stock Exchange use the personal data you provide us, please see our
Privacy Policy (https://www.lseg.com/privacy-and-cookie-policy)
.   END  TSTBKBBPDBKBAOD