Temple & Webster approaching profitability
Online furniture and homewares company Temple & Webster has today reported an 11 per cent year-on-year increase in revenue from its Australian operations to $64.5 million in FY17.
The company reported an EBITDA loss of $6.8 million, within its guidance of $6.8 to $7.3 million. It reduced its net loss before tax from $44.9 to $7.8 million, ending the year with $8.7 million in cash, with no debt.
Temple & Webster CEO Mark Coulter said the company had a strong finish to the 2017 financial year, with EBITDA loss reducing to $1.8 million in the second half, and Q4 being the first cashflow positive quarter to date.
“We continue to remain confident of reaching profitability during CY18 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,” Coulter said.
In a call with shareholders, Coulter said FY17 was a year of focusing on the core, including simplifying the strategy, focusing its marketing spend and reducing operating costs.
The company folded its Zizo and Milan Direct brands into Temple & Webster and went from five websites to one. This enabled it to focus marketing spend on the Temple & Webster brand alone and reduce its cost per first-time customer from $89 to $59.
It was also able to downsize from three offices in Sydney and Melbourne to one office in Sydney.
Temple & Webster made a strategic decision in FY17 to shift the product mix towards furniture, which it says is less competitive, since many online retailers, such as Amazon, shy away from bulky deliveries.
Its product mix is now 60 per cent furniture, compared to 52 per cent in FY16. Coulter said customers have embraced these changes, pointing to a 20 per cent year-on-year uplift in active customers and 13 per cent year-on-year uplift in net revenue per active customer.
With over 130,000 products for sale, Temple & Webster has the largest range of any retailer in its category in Australia. It aims to further expand the range in under-penetrated categories in FY18, including mattresses, gifting, outdoor and kitchen. It will also continue to add new private label brands and ranges.
Coulter said the company has had a good start to FY18, with all key metrics in line with expectations and has a clear path to profit.
Temple & Webster at-a-glance:
- 10 million plus page impressions monthly
- 1 million website users monthly
- 1.3 million plus email subscribers weekly
- 400,000 social media reach
- 160,000 active customers in the last twelve months
- 130,000 plus product listings
- 180 sub-categories
- 2.2 days, average time to dispatch