Plymouth-headquartered online building materials retailer CMO Group Plc has bought a plumbing business in a £5.7m deal - and is eyeing more acquisitions.
CMO, which has seen a 63% hike in sales, has agreed terms to snap up Darlington-based JTM Plumbing Ltd, a digital retailer of plumbing and heating supplies in a cash purchase.
This new business will be marketed under the plumbingsuperstore.co.uk domain name takes CMO into the new category of online plumbing and heating.
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It comes just seven months after it acquired Fast Growth 100 company Total Tiles and CMO chief executive Dean Murray said the business is planning further expansion.
He said: “We have grown organically and by making acquisitions and that remains our strategy. We will continue to add products and services and are looking at further acquisitions..
“We are constantly looking across the market to what will fit, businesses that are similar to ourselves, that are purely online and with a similar ethos.”
Initial growth will continue with the release of the CMO Trade App later this year, a B2B app for people in the building industry, with Mr Murray saying: “It will put all our services to tradesmen in their hands via a smartphone.”
CMO is now the 海角视频’s largest online-only retailer of building materials, and its unaudited Interim Results for the six months ended June 30, 2021, reveal revenue increased by 63% to £38.2m (H1 2020: £23.4m), reflecting strong organic growth and the £8.8m contribution from the acquisition of Total Tiles.
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Gross profit increased to £7.4m (H1 2020: £3.4m), and adjusted EBITDA (earnings before interest, tax, depreciation, amortisation, exceptional and acquisition costs) increased to £2.0m (H1 2020: £0.8m).
Mr Murray explained the company prefers to highlight EBITDA, a measure of profitability, rather than profit before tax, which increased to £0.5m (H1 2020: £0.7m loss), because it measures cash generated and leaves out financial charges.
CMO was private equity backed, and therefore had interest payments to make, but the company is now shareholder owned after completion of a successful IPO on the Stock Exchange’s AIM, which raised more than £27m.
“We are now listed and have paid off all the loans we had for previous growth,” said Mr Murray.
CMO 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.
It began as a small outfit based at Plymouth’s Airport Business Park, but after 43% compound growth over previous years it now has a large HQ at Burrington Way, where most of its 200-plus employees are based.
The company said its market remains buoyant and the group is managing industry headwinds well with an expectation to deliver double-digit sales growth in-line with full-year expectations.
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Mr Murray said the company is not immune to the current supply issues affecting British industry but said: “Our online only dropship model puts us in the best position to deal with this. We have not got stock stored across the country and can offer a vast range of products and therefore can offer substitutes more easily.”
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He added: “I would like to take this opportunity to extend a warm welcome to our new investors who came on board at IPO in July and to thank all of our colleagues for their continued hard work and commitment at this time. I am delighted to report a strong set of results meeting the expectations set at IPO. Our strategy is to take advantage of the channel shift online and low penetration of internet driven sales in an enormous and evolving marketplace, augmented by our dropship, asset light delivery model.
“I am also pleased to report a positive contribution from Total Tiles and the team in their first six months of trading within the enlarged CMO Group. The current challenges facing our industry are well documented however we are managing these well and remain confident of achieving continued double-digit sales growth in H2 to meet the board’s expectations.”