Temple and Webster (ASX:TPW) share price jumps 13% as revenue soars

Here's the details from Temple and Webster's FY21 results…

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The Temple & Webster Group Ltd (ASX: TPW) share price is jumping higher this morning after releasing its full-year results and a trading update.

At the time of writing, shares in the online furniture and homewares retailer are trading at $14.62, up 12.72%.

Temple and Webster share price on watch after more than doubling profit

  • Record revenue of $326.3 million, up 85% year-over-year
  • Earnings before interest, tax, depreciation, and amortisation (EBITDA) of $20.5 million, an increase of 141%
  • Active customers increased 62% year-over-year to 778,000
  • Record net profit after tax of $14 million, up 165% on the prior year
  • Cash flow positive year, finishing with $97.5 million cash in the bank (an increase of 156% from FY20)
  • Outlook positive with the company citing strong tailwings

What happened in FY21 for Temple and Webster

The Temple and Webster share price is in focus on Monday after reporting its full-year results for the 12 months ended 30 June. It turned out to be a record year for the online retailer in terms of revenue, profit, and customers.

According to the release, Temple and Webster racked in total revenue of $326.3 million in FY21 — reflecting an increase of 85% on the prior year. This substantial increase in sales revenue was assisted by a surge in online shopping following imposed government lockdowns.

The company made no secrets that COVID-19 has brought forward adoption for its offering. However, it was noted that these growth trends remained in place while there were little to no restrictions on trading.

Furthermore, Temple and Webster ended the financial year in a strong cash position after performing a $40 million capital raise and delivering a record profit. As such, the company holds a cash balance of $97.5 million. This opens up optionality for inorganic growth opportunities if/when they present themselves. Although, an EBITDA margin of 2% to 4% in the short term was highlighted as its re-investment strategy continues.

What did management say?

Commenting on the result, Temple and Webster Chief Executive Officer Mark Coulter said:

FY21 was another great year for Company, with full-year revenue up 85% to $326.3m and EBITDA up 141% to $20.5m. While we don't take for granted how fortunate we are to be able to trade through lockdowns, we believe COVID has accelerated the shift from offline to online that was already in progress. We remain focused on giving our customers a great experience, and hopefully having them enjoy their homes, even just a little bit more, during these tough times.

Additionally, with respect to the company's performance so far in FY22, Mr Coulter said:

While the start of FY22 has been difficult for many Australians, we remain focused on strengthening our customer proposition, built around having the biggest and best range of furniture and homewares, combined with inspirational content and a great customer service experience.

What's next for Temple and Webster?

The new financial year has been a strong one so far. Specifically, year-over-year revenue growth for between 1st July and 27th August 2021 compared to the year prior is 49%. At the same time, management highlighted the company continues to experience strong tailwinds.

The board expects the business to benefit from ongoing online shopping adoption, an acceleration in trends from COVID-19, an increase in discretionary income, and strong housing market growth. Unfortunately, no further details pertaining to forward guidance were supplied.

Meanwhile, Temple and Webster intend to continue its reinvestment strategy to grow market leadership. This is in line with the company's goal of becoming the largest retailer of furniture and homewares in its market.

Temple and Webster share price snapshot

The Temple and Webster share price has performed solidly over the course of the past year. Shareholders have enjoyed a 58% gain in the past 12 months. Meanwhile, the S&P/ASX 200 Index (ASX: XJO) has delivered roughly half that, with a 24% return.

Finally, the company trades at approximately a price-to-earnings (P/E) ratio of 111 times.

Motley Fool contributor Mitchell Lawler has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. owns shares of and has recommended Temple & Webster Group Ltd. The Motley Fool Australia has recommended Temple & Webster Group Ltd. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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