Online furniture retailer Temple & Webster lost a staggering $44.4 million in 2015-16 – more than double the $18.5 million loss forecast in its prospectus – cementing its status as the worst float of the past financial year.
The statutory net loss of $44.4 million for the year to June 30 exceeded market forecasts for a loss around $15.2 million and included $19.4 million in writedowns on online furniture retailers Milan Direct and Zizo, which were acquired for $26 million just before Temple & Webster’s $116 million initial public offer last December.
The statutory result also included IPO costs of $6.9 million and finance costs of $4.6 million.
The company, Australia’s largest pure play online furniture and homewares retailer, reported a proforma loss of $14.8 million before interest tax depreciation and amortisation, within its revised guidance but almost twice the proforma EBITDA loss of $8.5 million in the prospectus.
Proforma revenues rose just 3 per cent to $61.7 million, compared with a prospectus forecast of $65 million as the number of active customers stagnated around 180,000.
Customer acquisition costs rose and first time customers fell during the year, although both key metrics improved during the fourth quarter.
Temple & Webster listed last December after raising $61 million, $21 million of which went back to early stage investors including co-founders Mark Coulter and Conrad Yiu’s ArdenPoint and major shareholder Macquarie Capital.
Two months after the IPO, Temple & Webster revealed that first-half EBITDA losses had blown out from $3 million to $7.5 million after customer acquisition costs soared and warned that full-year losses would reach $14 million.
Temple & Webster shares, issued at $1.10, plummeted to 19¢ a share.
Chairman Carol Schwartz and Mr Coulter are hoping the company will break even by 2018 without having to raise more capital.
The company has cash of $18.4 million and no borrowings.
Mr Coulter took the reins from chief executive Brian Shanahan after a management shake-up in March.
Over the past few months the company has cut operating costs by 20 per cent, scaled back marketing spend, merged Zizo with the T&W site and closed two warehouses.
Cash burn has slowed by $400,000 a month and the company said cash generation had improved significantly in the June quarter due to better trading and the implementation of cash management strategies.
T&W has also opened a Milan Direct pop-up showroom in Melbourne, which allows customers to look and feel before they buy, and there are plans to open a Temple & Webster store in Sydney in the second half of 2017.
The online retailer competes with bricks-and-mortar rivals such as Harvey Norman, Nick Scali, Fantastic and Freedom.
The furniture and homewares market is estimated to be worth $12.6 billion, but only 4 per cent of sales have migrated online.
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