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Post Market Wrap | Temple & Webster Launch Online Home Improvement Website

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Temple & Webster Launch Online Home Improvement Website

  • Home improvement market estimated at $26B annually across nine million dwellings
  • Target market is renovators, builders and tradies as well as homeowners
  • Aiming for material Revenue and EBITDA positive business in FY26
  • Positive trading update with revenue up 23 percent in four months to 30 April
  • Increased share of wallet spend in the home supports continuing growth momentum.

Temple & Webster Group Limited (Temple & Webster or the Group) is an Australian homewares and furniture retailer, with a deliberate focus on technology as a key enabler to drive operational and working capital efficiency, within 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, the Australian operation of Wayfair and Milan Direct.

Launch of DIY online Home Improvement Website 

Temple & Webster have today launched a new online store aimed at DIY home renovators. To be known as The Build (www.thebuild.com.au), the focus is on the home improvement market, estimated at $26 billion nationally, according to IBISWorld Industry Reports. Renovators, builders and tradespeople are the target market, along with digitally native customers. 

The market potential is reinforced by more than nine million owner-occupied dwellings in Australia, where 40 to 60 percent of homeowners 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 occur each month nationally.     

The Group has currently 16 full-time employees as its initial team, comprising buyers and merchandisers, with 200 suppliers providing 20,000 products live on the website across 39 categories. The Group is targeting a material revenue and EBITDA positive business in FY26.  

Trading Update

The Group continues to trade well with revenue up 23 percent for the four months to 30 April, compared to the comparable period in 2021 and up 116 percent compared to 2020. The full-year EBITDA margin has been reaffirmed at approximately three percent, which is consistent with the 2-4 percent EBITDA margin range anticipated at the beginning of the financial year. 

The Group’s diversified supply chain continues to hold up well, ensuring it is well stocked and in a strong position to meet growth in demand going into the fourth quarter of the 2022 financial year.

Looking Ahead

Temple & Webster continue to invest in the Group’s future. This includes investing in data analytics, data personalisation and supply chain management, to support accurate and timely forecasting of optimum inventory levels to reliably fulfil anticipated customer demand. The Group has over 200,000 products on sale from hundreds of suppliers and successful execution of critical success factors such as stock availability is supporting consistent earnings growth in the current market. 

Launch of The Build is a natural growth path for Temple & Webster supported by the obvious cross-sell opportunities between home improvement and furniture and homewares. Significantly, Temple & Webster have stated that the long-term margin profile is expected to be superior to that of Furniture and Homewares. Capturing a greater share of wallet spend in the home at a time of rapid adoption of online purchasing, is certain to maintain the Group’s growth momentum well into the future.   

This Post Market Wrap is presented by Kodari Securities, written by Michael Kodari, CEO at KOSEC.

"Michael Kodari is one of the world's most consistent, top performing investor. A philanthropist and one of the prominent experts of the financial markets, he has been referred to as ‘the brightest 21st century entrepreneur in wealth management' by CNBC Asia and featured on Forbes. Featured on TV as the "Money Expert", on the weekly Sunday program "Elevator Pitch", he is recognised internationally by governments as he was the guest of honour for the event "Inside China's Future", chosen by the Chinese government from the funds management industry, attended by industry leaders, when they arrived in Sydney Australia, on April 2014. Michael and George Soros were the only two financiers in the world invited and chosen by the Chinese government to provide advice, and their expertise on Chinese government asset allocation offshore. With a strong background in funds management and stockbroking, Michael has worked with some of the most successful investors and consulted to leading financial institutions. He was the youngest person ever to appear on the expert panel for Fox, Sky News Business Channel at the age of 25 where he demonstrated his skillset across a 3 year period forming the most consistent track record and getting all his predictions right over that period. Michael writes for key financial publications, is regularly interviewed by various media and conducts conferences around the world."

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Money

Boeing CEO to depart with lucrative exit package despite chaos

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Boeing CEO Dave Calhoun is set to step down from his position at the end of the year, walking away with a substantial payout despite challenges faced during his tenure.

Here are the key points:

  • Massive Payout: Despite Boeing’s stock price plummeting by 43% since Calhoun took over as CEO in 2020, he is poised to receive a $24 million payment upon his departure.

  • Additional Compensation: Calhoun holds options that could potentially earn him an additional $45.5 million if his successor manages to boost Boeing’s share price by 37%.

  • Comparative Compensation: Calhoun’s compensation during his tenure exceeds that of CEOs in similar industries, despite Boeing’s stock underperforming in comparison.

Boeing CEO Dave Calhoun’s impending departure at the end of the year has sparked controversy as he stands to walk away with a substantial payout, despite the company’s tumultuous journey under his leadership.

READ MORE: Boeing CEO to step down

Despite inheriting a company reeling from the aftermath of two deadly 737 Max crashes, Calhoun’s tenure has been marred by further setbacks, including the recent Alaska Airlines door blowout incident that further tarnished Boeing’s reputation.

Boeing offers CEO $5.3 million incentive to stay through recovery …

With Boeing’s stock price plummeting by 43% during Calhoun’s time at the helm, questions arise about the correlation between executive compensation and company performance, especially in the face of such significant challenges.

‘Raised eyebrows’

Calhoun’s lucrative exit package, valued at $24 million, has raised eyebrows among shareholders and industry observers alike.

Additionally, the potential for Calhoun to earn an additional $45.5 million based on the future performance of Boeing’s shares has intensified scrutiny over executive compensation practices.

This sizable payout contrasts starkly with Boeing’s stock performance, which has significantly underperformed compared to both industry peers and broader market indices, highlighting the dissonance between executive rewards and shareholder value creation.

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Money

It’s been a record year for CEO compensation

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In 2023, Broadcom’s CEO Hock Tan was granted a stock award worth $161 million, propelling him into the realm of highest-paid CEOs.

However, as the company’s share price surged, the value of Tan’s award skyrocketed to approximately $1.3 billion, outpacing even the shareholders’ annual returns.

Tan’s compensation reflects a broader trend among top executives in the tech sector, where awards of restricted stock and stock options surged in value alongside company share prices.

Notably, CEOs like Charles Robbins of Cisco Systems and Shantanu Narayen of Adobe also saw substantial increases in their compensation, doubling in some cases.

The disclosure of such equity growth in executive compensation is a new requirement by the Securities and Exchange Commission (SEC), providing shareholders with insights into the changing value of executives’ awards throughout the year.

CEO pay is on the rise.

New heights

Overall, CEO pay at major S&P 500 companies reached new heights in 2023, rebounding from slower growth in the previous year. The median pay for these CEOs rose to $15.6 million, up from $14.1 million in 2022, reflecting a surge in equity awards.

Broadcom clarified that Tan’s stock award is designed to span five years, with no plans for additional equity grants or cash bonuses during that period.

Tan’s compensation, which amounts to approximately $33 million annually over five years, is contingent upon his continued tenure and specific share price targets.

While the initial valuation of Tan’s restricted shares stood at $160.5 million, the surge in Broadcom’s share price prompted the company to reassess the likelihood of meeting vesting conditions.

This reassessment suggests that Tan may not receive all the shares initially granted.

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Money

Market forecast: weather whirlwinds influencing investments

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Prime conditions for commodity investments arise from global weather shifts, geological tensions, and rising interest rates.

With global weather patterns causing disruptions in traditional supply chains, coupled with geopolitical tensions over natural resource access, and the anticipation of higher interest rates impacting financial markets, the conditions for commodity investments have reached exceptional levels.

Amidst this backdrop, Farrer Capital has emerged as a standout player, leveraging its unique ‘blue ocean’ approach to capitalize on price dislocations and scarce competition in the market.

Mark Wyld from MW Wealth joins the show to share his insights on the inclement weather impacting the market.

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