Temple & Webster (ASX: TPW) continues its rebound after its FY22 results

Nick Sundich Nick Sundich, August 16, 2022

Temple & Webster (ASX: TPW) witnessed the best investor reaction to any company that released its results this morning. After riding the waves of the COVID-19 furniture boom, shares retreated during the Tech Wreck, only to rebound in recent weeks. And today’s results have given investors more confidence.   

 

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Was the COVID-19 boom a fad or a permanent shift? 

During COVID-19, there was an unexpected boom in furniture and homewares as people shifted to working from home.  

This buoyed the share price of Temple & Webster from $2.11 at the bottom of the Corona Crash to a peak of nearly $14 in September last year. Shares fell as low as $3.20 in June this year, but have rebounded to over $5 this morning, as shares jumped 20% compared to yesterday’s close. 

 

Temple & Webster (ASX:TPW) share price chart (Graph: TradingView)

 

Temple & Webster makes $426.3m in revenue and a $13.2m profit 

Temple & Webster would’ve been eager to show investors that its growth was sustainable and FY21 was not just a one-off. And in today’s results, it appears this was the case. In FY22, Temple & Webster made $426.3m in revenue, up 31% on last year and 142% on FY20. Its profit amounted to $13.2m and, while down 31% from last year, this represented CAGR of 29% over two years.  

Active customers grew 21% to a total of 940,000, the EBITDA margin came in at 3.8% (at the high end of its 2-4% target range) and it closed the year with a cash balance of $101m.  

 

Will Temple & Webster’s growth continue? 

Shareholders have reason to be optimistic on the basis that growth did not go backwards in FY22 even though demand slowed. The company told shareholders that July 2022 trade was down 21% year on year, but stressed this was ahead of its estimates and reminded shareholders July 2021 was boosted by lockdowns. 

Lastly, the company upgraded its EBITDA margin guidance from 2-4% to 3-5% thanks to investments into The Build and that inventory levels remained ahead of internal targets. 

So, all in all, this morning’s good news show explains to 20% share price spike today! 

 

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