Launch of Temple & Webster online home improvement website
- Home improvement market estimated at $26 billion a year across nine million homes
- The target market is renovators, builders and tradesmen as well as homeowners
- Aim for strong FY26 revenue and EBITDA
- Positive business update with revenue up 23% in four months to April 30
- The increase in the share of portfolio expenditure in the house supports the continuation of the growth momentum.
Temple & Webster Group Limited (Temple & Webster or the Group) is an Australian homeware and furniture retailer, with a deliberate focus on technology as a key factor in driving operational efficiency and working capital , as part of a “capital-lite” business model. The primary driver of this capital-efficient balance sheet is the internet, in conjunction with data analytics and artificial intelligence (“AI”).
The brand was founded in 2011 and listed on the ASX as Temple & Webster Group in December 2015. The float followed the acquisition of two other businesses, Wayfair’s Australian operation and Milan Direct.
Home Improvement Online DIY Website Launched
Temple & Webster today launched a new online store aimed at do-it-yourselfers. to be known as building (www.thebuild.com.au), the focus is on the home improvement market, estimated at $26 billion nationwide, according to IBISWorld Industry Reports. Renovators, builders and craftsmen are the target market, as well as digital native customers.
Market potential is bolstered by over nine million owner-occupied homes in Australia, where 40-60% of owners undertake or plan to undertake a design project each year. Projects include minor repairs, painting, new bathrooms and kitchens, and redecorating to complete or build home extensions. According to ABS data (based on Council approvals), it is estimated that more than $1 billion in approved renovations take place nationwide each month.
The Group currently has 16 full-time employees in its initial team, made up of buyers and merchandisers, with 200 suppliers offering 20,000 products live on the website in 39 categories. The Group is targeting significantly positive business in terms of revenue and EBITDA in FY26.
The Group continues to trade well with revenues up 23% for the four months to April 30, compared to the comparable period in 2021 and up 116% compared to 2020. The EBITDA margin for the full year was reaffirmed at around 3%, which is in line with the 2-4% EBITDA margin range expected at the start of the year.
The Group’s diversified supply chain continues to hold up well, allowing it to be well supplied and well positioned to meet growing demand as we approach the fourth quarter of fiscal 2022.
Temple & Webster continues to invest in the Group’s future. This includes investing in data analytics, data customization and supply chain management, to support accurate and timely forecasting of optimal inventory levels to reliably meet anticipated demand. client. The Group has over 200,000 products for sale from hundreds of suppliers and the successful execution of critical success factors such as inventory availability supports consistent profit growth in today’s market.
Launch of building is a natural growth path for Temple & Webster, supported by the obvious cross-selling opportunities between home improvement, furniture and housewares. Significantly, Temple & Webster said the long-term margin profile should be higher than Furniture and Homewares. Capturing a greater share of wallet spending at home in an era of rapid adoption of online shopping is certain to maintain the Group’s growth momentum well into the future.
This Post Market Wrap is presented by Kodari Securities, authored by Michael Kodari, CEO of KOSEC.