The Temple & Webster Group Ltd (ASX: TPW) share price is on watch today following the release of online retailer's half-year results.
Temple & Webster shares were up by as much as 3.9% today but are now trading 0.78% lower at $3.81 at the time of writing.
Strong 50% increase in revenue
Temple & Webster announced revenue of $74.1 million for the half-year period, up 50% on the prior corresponding pcp (pcp). Meanwhile, earnings before interest, tax, depreciation and amortisation (EBITDA) came in at $2.3 million. This compares to EBITDA of $1.0 million in the pcp.
The company reported net profit before tax (NPBT) of $2.0 million, a significant jump from $0.8 million in the pcp.
However, net profit after tax (NPAT) dropped 3% lower to $2.9 million. On this, the company noted that the prior period benefited from the recognition of a larger deferred tax asset.
Pleasingly, cash flow was positive for the half-year to December 2019, up by $2.2 million, with cash on the books of $15.7 million and no debt.
This cash flow positive achievement, the company commented, benefits from its cash flow positive business model, offset by the investments it has made into its Private Label inventory. Temple & Webster's inventory and creditor metrics are all reported to be continuing to track within target ranges.
Further, the company's active customer base was reported to be up significantly by 45% year on year, while its Trade and Commercial division did particularly well, up a massive 75% year-on-year.
Guidance and outlook for rest of FY20
Temple & Webster commented that trading in the second half of FY20 has started strongly. So far in the second half (to yesterday, February 17), year-on-year revenue growth has come in at an impressive 55%.
The company further commented that it is committed to a high growth strategy, however, it does remain watchful of the broader business environment in which it operates.
Temple & Webster said that it will be reinvesting short-term operating leverage into growth initiatives, while still maintaining a strategy to be profitable.
