Plymouth-headquartered building and DIY e-commerce firm CMO Group Plc is planning to float on the London Stock Exchange’s Alternative Investment Market after seeing sales continue to grow in 2021.
The company, which has benefited from a lockdown boom in DIY, is to seek admission for its shares to trade on AIM, and expects to be doing so by early July,
Currently the 海角视频’s largest online-only retailer of building materials, the group currently operates seven specialist websites, Roofingsuperstore.co.uk, Drainagesuperstore.co.uk, Insulationsuperstore.co.uk, Doorsuperstore.co.uk, Tileandfloorsuperstore.co.uk, cmotrade.co.uk and Totaltiles.co.uk.
Its sites list more than 75,000 products, and it boasts its “unique digital hybrid service model”, developed over more than 10 years, combines specialist advice and expertise tailored to category and customer needs online, bridging the gap between traditional bricks-and-mortar retailers and digital retailing.
CMO, which has its Plymouth base at Burrington Way, said it has established trusted partnerships with manufacturers and supply partners across the 海角视频. Its business model is asset light with the majority of products dropshipped directly from the manufacturers to its customers.
It has seen a strong start to the year with like-for-like sales growth, for the five months to the end of May 2021, in excess of 30% compared to the previous year and total sales growth, including acquisitions, in excess of 70% over the same period.
Margins and costs remain within expectations and the directors expect CMO to continue to benefit from the underlying strength of the home improvement market and long-term structural shifts to online, and behavioural changes triggered by the Covid pandemic.
It said its customers have remained loyal with the strong growth evidenced in repeat business, average order value and customer lifetime value.
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The firm’s directors believe there is significant opportunity to continue growing sales organically through a programme of category expansion into new segments, continuous development of its multi-channel marketing strategy to attract and maintain new customers, increased use of artificial intelligence (AI) to inform marketing campaigns, personalised customer engagement and increased take-up of its trade offer.
This will be supplemented by selective, opportunistic acquisitions that will strengthen existing product categories or provide an entry point for new categories. In 2020, CMO acquired online tile retailer Total Tiles, which is itself seeing impressive growth.
Furthermore, directors expect group EBITDA margins, a measure of profitability, to improve as new categories bring higher product margins, as demonstrated by Total Tiles, buying terms improve with scale, fixed costs are better leveraged and manufacturers further embrace the dropship model.
CMO believes it will “revolutionise” the shopping experience of homeowners and tradespeople to become the “go to” digital retailer of building materials, providing market leading product choice, relevant help and advice, and a personalised customer experience.
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Dean Murray, CMO's chief executive, said: “We are delighted to announce our intention to list on AIM signifying an exciting new chapter in the Group's long-term development.
“We have enjoyed strong, consistent growth driven by the group’s successful customer proposition, first mover advantage and scalable digital platform.
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“Our clear and focussed strategy will enable us to continue to capture further profitable share in an under penetrated market as customers increasingly move online.
“We will support this through targeted category expansion and a multi-channel marketing plan to drive revenue growth and margin enhancement.”
Liberum Capital Limited is acting as nominated adviser and sole bookrunner in relation to the admission to AIM. GCA Altium is acting as financial adviser.