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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.

Image: file

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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Management shake up at under fire Qantas

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There’s been a management shake up at Australia’s flag carrier airline Qantas, which has come under fire for cancellations and delays

Jetstar CEO and longtime Qantas executive Gareth Evans has resigned.

He was touted as a potential replacement for controversial Qantas CEO Alan Joyce.

Gareth Evans has been with Qantas for 23 years.

He has been chief of Jetstar since 2017, but has worked across the group and has now “decided this is the right moment to move on”.

This comes as the aviation grapples with the higher fuel prices and staffing issues at airports that are affecting much of the industry globally.

Strong demand

Qantas has also updated the market, saying it’s on track to record second half earnings of just over 500 million dollars.

Underlying profit is set to return in FY23, while debt levels are now well below pre-pandemic levels.

Qantas says this is due to continued strong domestic and international travel demand.

Qantas has come under fire for long delays and cancellations
Qantas has come under fire for long delays and cancellations

After peaking at more than $6.4bn at the height of the pandemic, net debt is expected to fall to around $4bn by June 30, an improvement of around $1.5bn in the past six months.

The airline has come under sustained pressure, with many passengers complaining about long queues, cancellations and delays.

Qantas is calling for patience ahead of the winter school break rush as it hires more staff to manage increased demand at airports.

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Business

Nike to fully exit Russia

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U.S. sportswear maker Nike is making a full exit from Russia, three months after suspending its operations there, the company said in an emailed statement Thursday

The sportswear giant had said back in March that it would suspend operations at all the stores it owns or operates there.

On Thursday (June 23) the firm said it would leave the country altogether.

In a statement, Nike said it would scale down over the coming months.

The move is largely symbolic for the company, which gets less than 1% of its revenue from Russia and Ukraine combined.

It says any stores that are still open there are run by independent partners.

In May, Russian media reported that Nike had not renewed agreements with Inventive Retail Group, its largest franchisee there.

Now the full exit lputs Nike in line with other major western brands such as McDonald’s and Google.

Foreign companies seeking to leave face the prospect of new laws being passed that will allow Moscow to seize assets and impose criminal penalties.

That has prompted some businesses to accelerate their departure plans.

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Business

U.S. orders vape company Juul to cease sales

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Juul has been an industry leader in the vaping sphere since its establishment in 2015, controlling 75 per cent of America’s market by its third year of operations.

This is just the latest crackdown on the Tabacco industry by the Biden administration, all part of a sweeping effort to regulate the sector after years of delay.

The White House has also announced a rule to establish a maximum level of nicotine in tobacco products in an attempt to make them less addictive.

After a nearly two-year-long review, the FDA said Juul submitted insufficient and conflicting data to show that its e-cigarettes met public health standards.

The regulator also said the findings raised “significant questions,” including whether potentially harmful chemicals could leach out of Juul pods.

The decision potentially deals a fatal blow to the once high-flying San Francisco company.

Juul did not immediately respond to a Reuters request for comment.

The FDA had to judge whether Juul’s products, which have been sold for years without being officially authorized by the agency, were effective in getting smokers to quit and, if so, whether the benefits to smokers outweighed the potential health risks to new e-cigarette users, including teenagers.

“They prey on children.”

Democratic Senator Dick Durbin hailed the decision by the FDA on Thursday, but said “they’re in for a legal battle for sure.”

Earlier this week, the Biden administration said it also plans to propose a rule establishing a maximum nicotine level in cigarettes and other tobacco products to make them less addictive.

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