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VISIT NEW SITESales soar at e-commerce group, Temple & Webster
2 minute read
Temple & Webster (ASX:TPW), Australia’s largest e‐commerce company in the furniture and homewares market, has provided a promising update on the impact of the COVID-19 virus on its business.
This included commentary on trading conditions as well as the group’s financial position and long-term strategy, all of which appear sound.
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.
A feature of the update was the group’s sales figures for the second half of fiscal 2020 which have been boosted by a particularly strong performance in April.
Second half revenue is up 74% on a year-on-year basis.
To put this in perspective, year-on-year revenues in the first half of fiscal 2020 were up 50%.
At a time when flattening the curve is making headlines across the globe, Temple and Webster’s curve is showing no signs of flattening in what is a healthy sign.
Zero debt and $20 million in cash
Management has not had to deal with the challenges that many retailers are facing as 95% of the company’s workforce, both onshore and offshore, have been working from home since the beginning of March.
Chief executive and co-founder Mark Coulter also noted that the company has been working closely with its partners, especially on the logistics front, to ensure the health and safety of their staff and the group’s customers by implementing procedures at the point of delivery to minimise the risk of infection.
From a financial perspective, Temple & Webster is in a robust position, being profitable and cash flow positive with a capital light business model.
E-commerce companies can scale up or down in line with business activity, as well as operating off a low fixed cost base.
Consequently, the company appears to be a relatively safe haven in the retail space, enhanced by its strong balance sheet which features zero debt and cash of $20 million.
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