The Temple & Webster Group Ltd (ASX: TPW) share price is surging on Thursday.
In early trade, the online furniture and homewares retailer's shares were up as much as 17.5% to a record high of $16.78.
The catalyst for this has been the release of an impressive half year result this morning.
Temple & Webster share price higher on strong results
- Revenue up 23.6% to $313.7 million
- Delivered margin up 25.7% to $101.5 million
- EBITDA up 76.3% to $13.2 million
- EBITDA margin up 126 basis points to 4.2%
- Net profit after tax up 118% to $9 million
- Free cash flow up 61.4% to $32.5 million
What happened during the first half?
For the six months ended 31 December, Temple & Webster reported a 23.6% increase in revenue to $313.7 million. This was supported by growth in both new and repeat customers, and higher average order values.
Active customers were ~1.2 million during the half, which is up 22% on the prior corresponding period. Revenue per active customer was up 2% to $470.
Management revealed that its market share is at an all-time high of 2.9% of the total Australian furniture and homewares market.
The company's EBITDA margin improved by 126 basis points to 4.2% during the half. This is above its FY 2025 margin guidance range of 1% to 3%, which management advised reflects the scalability of its cost base.
Management notes that artificial intelligence is now handling 60%+ of all customer pre- and post-sales support interactions. This has resulted in a greater than 50% reduction in customer care costs since the first half of FY 2023.
Fixed costs as a percentage of revenue declined to 10.5% during the first half.
On the bottom line, Temple & Webster recorded a net profit after tax to $9 million, which is up 118% on the prior corresponding period.
At the end of the period, its cash balance was $139 million with no debt. This is up from $107.2 million since 30 June 2024. Management believes this leaves the business well-capitalised and fully-funded to continue executing on its growth plans. It also highlights that its current on-market share buy-back program remains in place until June 2025.
Management commentary
Temple & Webster's CEO, Mark Coulter, was happy with the half. He said:
Temple & Webster has again delivered a record half, with strong performance against all key metrics, against a challenging macro and consumer backdrop.
We continue to deliver on our mission of providing beautiful items for the home at great value, as reflected in our strong revenue, active customer and market share growth.
Outlook
Management revealed that its market share gains and revenue growth continued into the second half, with revenue up 16% year-on-year from 1 January to 10 February 2025. It also notes that its growth rate has accelerated in February.
It is expecting this trend to continue, given the easing of comparison growth rates and the margin flexibility it has built over the first half of the financial year.
Speaking of which, management has reiterated its EBITDA margin guidance for FY 2025 of 1% to 3%. It also believes that it remains on-track to achieve its mid-term goal of $1 billion+ in annual revenue.
The Temple & Webster share price is now up 45% over the past 12 months.
