TPW - Temple & Webster Group

[Dona Ferentes]

One of the bigger down moves today.
Price has gapped down, could hardly be a worse looking chart at this point; might undo all its post covid rally?

All what I put in the discretionary bucket, whether shopfront (HVN, NCK) or online (CTT, TPW, HT8, etc) or the hybrids (BWX, ABY) and others, are down significantly, nudging those Covid lows.

But the staples, WOW, COL, MTS are holding up rather well. Something about disposable income and belt tightening as we move towards higher interest rates?

 

[finicky]

TPW down 10% early in the day. I was going to comment on the chart over the w/e, speculating ax to whether a low was being made or was it treading water before another dip. Truly have forgotten what my conclusion was, if any, but it looks dicey and on the edge so far today.

I didn't read thoroughly, but there's goss elsewhere from mainly one highly negative but seemingly well researched poster that the 'drop and ship' model is showing up crtical flaws during these Covid times when it comes to timely delivery and condition of goods when they do arrive (mould). Also alleged that the company has a facebook page receiving a blizzard of complaints, not just about service but lack of management response and compensation - or something like that; its all second hand from me; I didn't read closely, don't have an idea if there is a downramper at work and don't go on facebook (unjoined)

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Daily

 

[finicky]

TPW looking better again. Is well outside its downtrend line. Is tilting again at that $4 level. A possible short pullback might still be compatible with positive construction. Daily momentum has been rising divergently to price. Bets off if it falls below $3 recent support. Actually, I'm not betting, not looking to buy.

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Daily

 

[finicky]

TPW up 24% in first hour of trading!
(Kogan up even more)
TPW chart - while a pullback is likely, the probability of the downtrend being over has improved. Price has gapped up strongly intraday and broken local resistance of $4.

Not Held

 

[Dona Ferentes]

Temple & Webster has warned of cyclical headwinds in FY 2023

• Sales were down 21 per cent in July and off 17 per cent over the first half of August.
• For FY 2022 it posted a profit down 14.2 per cent to $12 million on sales up 30.6 per cent to $426.3 million on an EBITDA margin of 3.8 per cent.
• Expects a return to double-digit sales growth during FY 2023 once it finishes lapping COVID-19 lockdowns from the prior year period.
• Expects an EBITDA margin in the 3 per cent to 5 per cent range in FY 2023 after backing out investment costs into its new The Build platform.

 

[finicky]

Surprising - but looks like a bullish breakout from a flag and continuation of the rally to me. Early in the day caveat. Maybe institutions and managers were wary of worse?

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Daily

 

[Dona Ferentes]

TPW looking better again.

Report out.

• In FY23, the Group achieved revenue of $396 million and a Net Profit Before Tax of $12.0 million (The Group recommends using profit before tax as opposed to profit after tax given various tax adjustments over the prior period due to the recognition of historical tax losses which impact like for like comparisons).
• Pleasingly ~90% of the COVID-19 impacted revenue was retained in FY23, with the Group returning to year on year revenue growth in Q4FY23. EBITDA for the year was $14.8 million (3.7%) which was within the Group’s stated 3-5% range.
• EBITDA for H2 FY23 was 80% higher vs the pcp as a result of improving delivered margins and cost base management, with AI led efficiency gains yielding strong early results.
• Please see the Group’s FY23 results presentation lodged with the ASX on 15 August 2023 for information relating to the outlook for FY24.
• There were no dividends paid, recommended or declared during the current financial period.

and, that would be a Covid burst and retreat?

 

[Dona Ferentes]

TPW reported yesterday .. and I guess the market priced the news accurately early on Day 1.

 

[Dona Ferentes]

and a durable model, not just Covid flash in da pan

AGM this week:

The Black Friday-Cyber Monday trading period continues to grow in importance as customers bring their Christmas shopping forward. This year the 4-day period delivered $17.4m in sales, up 101% on last year, and included multiple record days.
• We continue to grow our market share at a time when the overall furniture and homewares market is down, reflecting the resilience of our business model and flexibility of our merchandising strategy. Growing our market share is a key strategic focus, which supports our goal of becoming Australia’s largest retailer of furniture and homewares.
• Our $30m on-market buyback has bought back 3.9m shares at a total cost of $19.9m to date. Our cash balance remains above $100m which provides significant flexibility to accelerate both organic growth and potentially inorganic opportunities.
• We reaffirm our EBITDA margin guidance for FY24.

 

[finicky]

@Dona Ferentes makes it more likely to me that TPW has had a persuasive downramper in the past. He was very busy. Put me off following it anyway, which is my fault of course.

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[galumay]

I just dont understand why its so incredibly over priced! Its priced like its a SAAS with a infinite 30% growth rate and a massive competitive advantage!!

Other than the greater fool theory, how would a shareholder expect to get a return on capital from this business?

 

[tech/a]

As an aside
Ive bought quite a bit from these guys,I found them impressive!

 

[Dona Ferentes]

this one constantly surprises me.
.
Temple & Webster beat sales expectations for the first half of the 2024 financial year, with revenue rising 23 per cent to $254 million, driven by growth in repeat and new customers.

Earnings before interest, tax, depreciation and amortisation reached $7.5 million, with an EBITDA margin of 2.9 per cent, hitting the top end of full-year guidance of 1 per cent to 3 per cent.

Reported net profit rose 6 per cent to $4.13 million.

Millennials spent up on furniture as they established families and upgraded homes and apartments, with the second quarter helped by Black Friday sales. The majority of revenue is from exclusive products.

Chief executive and co-founder Mark Coulter said the strong momentum in the first half continued into the second half, with revenue from January 1 to February 11 gaining 35 per cent, driven by both first-time and repeat customers.

Mr Coulter said the group delivered a record half in the face of the toughest headwinds.

“Pleasingly, our growth was driven by both first-time customers and repeat customers, which led to us crossing the 1 million Active Customer mark in February this year. This means that our amazing range, great value proposition and incredible service has resonated with 1 million Australians in the last 12 months,” he said.

 

[finicky]

A perfect looking double bottom made July '22 and Mar '23, although not quite sure why I say that. I imagine I would have been scared off buying upon the return to $3 level. MACD offered encouragement at that time with divergence from the price lows. Anyway never considered buying so no regrets.

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WEEKLY

 

[Dona Ferentes]

opened up 25 per cent, close to $12

Financial highlights:
● Record FY24 revenue of $498m, up 26% year on year
● Growth was driven by active customers which were up 31% to an all-time high of 1.1 million
● FY25 has started strongly with trading up 26% (01 July – 11 August) yoy
● EBITDA (excluding one-off costs) of $13.1m at a 2.6% margin was at the top end of guidance
● Asset light, negative working capital model drove free cash flow of +$25m
● Closing cash balance of $116m and no debt
● On track for $1b+ in mid-term annual sales target