Temple & Webster books sixfold increase in half-year earnings

Online shoppers stuck at home because of COVID have given a record-setting profit boost to Temple & Webster.

Temple & Webster saw sales double in the first half of its 2021 financial year. Picture: Denise Braki

Online homewares retailer Temple & Webster has paraded the strength of online shopping through the COVID-19 pandemic, kicking off earnings season for 2021 with an almost sixfold increase in pre-tax earnings and a doubling of sales.

Releasing its unaudited accounts for the first half of fiscal 2021, Temple & Webster has set the scene for what should be a thumping profit season for online retailers which struck new popularity and accelerated growth as customers turned to online shopping amid months of lockdowns and social distancing restrictions.

And the tailwinds of more than $60 billion in consumer spending typically directed at international travel as well as continued strength in the housing market was expected to deliver significant growth potential for Temple & Webster in the second half of 2021.

Temple & Webster announced on Tuesday that first half revenue had pounced 118 per cent to $161.6 million with EBITDA growing by a mammoth 556 per cent to $14.8 against EBITDA of only $2.3m in 2020.

Such was the boom in demand heading towards Christmas and bolstered by promotions such as Black Friday and Cyber Monday that in November the retailer booked its first ever $3 million day in checkout revenue

Cash reserves for the group stood at a healthy $85.7m at the end of December, more that double its cash holdings in the beginning of June. Temple & Webster, which has become a popular retailer for furniture, furnishings and other homewares, has not released its net profit results and will produce its full accounts later this month.

Temple & Webster CEO Mark Coulter. Picture: Supplied.

However, the earnings for the December half showed record results with sales rocketing by 160 per cent in the peak months of the COVID-19 pandemic in July and August, with that sales bonanza cooling somewhat after Christmas but still up a robust 100 per cent in January.

Temple & Webster said it delivered margins that were currently tracking above short-mid term target of around 30 per cent, primarily driven by the growth in its private label range, which now represents around 25 per cent of sales.

Despite the booming December half, Temple & Webster shares fell 68 cents, or 6.16 per cent, to $10.36. The shares have almost tripled in the last 12 months.

In terms of the trading outlook heading into the second half of 2021, Temple & Webster said the June half had started strongly, with January’s revenue growth tracking in excess of 100 per cent.

It said it was building on a number of continued trends in the economy including the ongoing adoption of online shopping due to structural and demographic shifts, an acceleration of these trends due to COVID-19, an increase in discretionary income due to travel restrictions and the continued recovery of the housing market and unemployment levels.

“I am pleased to present a great set of results for the first half of fiscal 2021,” said Temple & Webster chief executive Mark Coulter.

“While 2020 remained a challenge for the country, we are proud that many Australians continued to turn to Temple & Webster for their furniture and homewares needs. It is great to see our revenue growth translating into operating leverage and significant profit growth.

“This allows us to accelerate our investment into areas such as data, technology, private label and brand awareness to further differentiate our proposition”.

Mr Coulter said the retailer’s strategy of being a category specialist, with a clear customer offering built around the biggest and best range of furniture and homewares in the country, combined with the most inspirational content and services and a great delivery experience and customer service, was working.