31-Aug-2020:  Announcement of FY2020 results and FY2021 trading update   and   Full Year 2020 results Investor Presentation   plus   Appendix 4E and 2020 Annual Report

TPW's share price rose +18% today on these numbers.  A very good result, with more to come!

Temple & Webster Full Year Results to 30 June 2020 and FY21 Trading Update

Temple & Webster (ASX: TPW), Australia’s largest e-commerce company in the furniture and homewares market* , today released its Appendix 4E, Annual Report and Results Presentation for the period ending 30 June 2020.

PLEASE NOTE THERE ARE NO CHANGES TO THE FY20 RESULTS CONTAINED WITHIN THE INVESTOR PRESENTATION LODGED WITH THE ASX ON THE 28TH JULY.

Key FY20 Highlights

• Full year revenue of $176.3m up 74% year on year (H2 revenue up 96% vs pcp; Q4 revenue up 130% vs pcp)
• EBITDA of $8.5m, versus $1.5m in the prior corresponding period** 
• NPAT result of $13.9m which included an income tax benefit of $5.9m
• Cash flow positive year with ending cash of $38.1m and no debt (excludes proceeds from recent $40m placement to strengthen balance sheet)
• Active customers up 77% YoY to ~480k
• Trade and Commercial division up 68% YoY
• First $2 million day in June (checkout revenue***)
• Customer satisfaction reached record levels in Q4 (NPS 65%+)
• 12-month marketing ROI in line with FY19 at ~2.6x
• Small investment into a start-up developing AI interior design tools

Notes:

1. (*) IBISWorld Industry Report OD4176 Online Household Furniture Sales in Australia
2. (**) Both FY19 and FY20 numbers take into consideration the new lease accounting standard AASB16
3. (***) Checkout revenue is pre accounting adjustments (deferred revenue, refund provision)
4. (****) Checkout revenue is pre accounting adjustments (deferred revenue, refund provision)
5. (*****) July/August EBITDA result quoted below is an actual July result plus an expected August EBITDA result based on MTD (month-to-date) August trading.

FY21 Trading & Business Update

• FY21 has started strongly with YoY revenue**** growth of 161% (to Aug 27)
• Growth was consistent across July and August, with both months trading ~160% up on pcp
• Contribution margin tracking above 15%
• EBITDA for July/August (2-month period) will be ~$6m***** (see notes above)
• Cash of $81m (and no debt) as at Aug 27
• Customer satisfaction still high (NPS remains over 65%) and cohorts of newly acquired customers are performing well compared to historical like-for-like cohorts
• iOS Mobile app has launched into the app store
• After significant analysis, our second national TV campaign will commence end of Q1

Temple & Webster CEO, Mark Coulter, said “I want to reiterate the great job the Temple & Webster team have done in stepping up to keep looking after our customers during this challenging period. As you can see from our trading update, Australians are still turning to the online channel to meet their ongoing needs. We continue to focus on customer satisfaction to ensure that customers who are trialling online shopping for the first time have a great experience and therefore will come back.”

“In July we crossed the magical milestone of 500,000 active customers. That’s half a million Australian homes which now have something from Temple & Webster in them, which as a cofounder makes me very proud. Our 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, is working. The advantages of being the online market leader are apparent as we continue to grow our market share” said Coulter.

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About the Temple & Webster Group

Temple & Webster is Australia’s leading online retailer of furniture and homewares.

Temple & Webster has over 180,000 products on sale from hundreds of suppliers. The business runs an innovative drop-shipping model, whereby products are sent directly to customers by suppliers thereby enabling faster delivery times and reducing the need to hold inventory thereby allowing a larger product range.

The drop ship range is complemented by a private label range which is sourced directly by Temple & Webster from overseas suppliers.

Temple & Webster’s registered office and principal place of business is Unit 1a, 1-7 Unwins Bridge Road, St Peters, Sydney, Australia and is listed on the ASX under the code TPW.

30-July-2020:  In this LivewireMarkets Buy-Hold-Sell segment, Vishal Teckchandani discusses CCX (City Chic Collective), TPW (Temple & Webster) and UWL (Uniti Group, formerly Uniti Wireless Group) with Tobias Yao from Wilsons (Wilson Asset Management Group) and Arden Jennings from Ausbill.

Tobias and Arden both rate CCX, TPW and UWL as BUYS, and Arden said that both UWL and CCX were high conviction positions for Ausbill, with CCX in both their Ausbil Small Cap Fund and their Ausbill Microcap Fund.  However, both WAM Funds (Wilsons) and Ausbill clearly hold all 3 companies in their respective funds.

Tobias also likes IFM (Infomedia) and Arden likes LIC (Lifestyle Communities).

Warning:  Vishal's puns could elicit the odd groan...

June 29th, 2020:  WAM Funds' Tobias Yao: "The fundie looking for the next Afterpay"

Tobias Yao in the Australian Financial Review

WAM Funds Portfolio Manager Tobias Yao shared his personal investing journey in the Australian Financial Review’s ‘Monday Fundie’ column.  Tobias discussed his love of disruptive technologies and business models, the thrill of finding emergent industries and why WAM Funds like online retailer Temple & Webster Group (ASX: TPW).

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As an aside, I also note that TPW is a company favoured by Claude Walker, who quit his job at The Motley Fool (Claude ran their "Hidden Gems" subscription service) 2 years ago, and is now writing for "A Rich Life".  Claude has been bullish on Temple & Webster on Ausbiz' "The Call" in recent weeks (during that episode he mentions TPW while discussing HVN), but I believe he sold out too early and now regrets that decision. 

It's a lesson I've also had to learn the hard way - it's not so much to let your winner run, although that's part of it.  It's more that when you think something is overpriced, it doesn't mean it won't go even higher, so rather than sell out entirely, just start trimming your position.  In other words, if it goes up 50%, sell one third, to take you back to your original weighting, and then rinse and repeat.  For example. 

However, everybody has to find what works for them personally.  I personally like to trim my winners gradually rather than sell out entirely, until the investment thesis is busted, in which case I'll be out PDQ.  I've also learned not to muck around when a company is no longer what you thought it was when you invested in it. 

I don't personally hold TPW.  I find it hard to buy companies that have gone vertical - like they have recently.  However, I agree with Tobias and Claude that TPW has the type of retail business model that is going to continue to work very well in our brave new world, and I'd certainly be looking at them if they had a decent pull-back.