Online building materials retailer CMO Group has returned to profit as sales increased, despite what it called a “challenging” year.
The Plymouth-headquartered business, which has said it is seeking to disrupt the predominantly offline builders merchant market it values at £29bn, reported an operating profit of £600,000 for 2022, rebounding from a £3.3m operating loss made in 2021.
The Aim-listed firm said revenue increased by 9% to £83.1m during the period, with like-for-like sales growth of 2% at its online stores, despite “industry headwinds”.
Bosses said the firm had not been “completely immune” to challenges posed by the war in Ukraine, “dramatically higher” energy costs, surging inflation, higher interest rates and the subsequent impact on consumer spending.
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The company said rising costs, particularly for the transportation of goods, had impacted profitability, with adjusted earnings before interest, taxes, depreciation and amortization, down to £2.1m, compared to £3.7m in 2020.
The group’s Total Tiles website saw like-for-like sales contract by 4%, against what the board called a “difficult comparative”, with its margin decline, due to a one off “pricing management issue”.
Last year the group launched its online Plumbing Superstore brand and rebranded its CMO Trade business to Building Superstore, which saw revenue grow by a third.
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Chief executive Dean Murray said: "Despite the macroeconomic challenges in 2022, CMO continued to grow sales, while also generating more repeat sales and increased average order values, further validating its model and continuing to disrupt the largely traditional builders merchant market.
“Our strategy remains unchanged, and we are focused on continuing to drive profitable sales growth through our existing superstores and through the creation of new channels.”
The board said the firm’s current financial year had begun “in line with our expectations”, and it was “confident” of delivering value for shareholders. However, it warned the wider economic backdrop remained “challenging” with the timing of a recovery in consumer confidence “uncertain”.
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