CMO Group confident after full-year revenue growth

Building materials retailer CMO Group reported a 9% increase in revenue in its preliminary results on Friday, to £83.1m, despite a challenging year for retail.

The AIM-traded company said second-half revenue was ahead 9.3% at £42.3m, outperforming the builders merchant market by 48%.

Its non-financial metrics revealed 34% year-on-year growth in revenue per session in the 12 months ended 31 December, and 46% of orders coming from repeat customers, indicating strong brand loyalty.

Digital marketing costs remained in line with expectations at about 5% of sales, while the average order value increased 18%, and the marketable database grew by 13% year-on-year.

Operational progress in 2022 included the launch of Plumbing Superstore, rebranding and redesigning all ‘Superstores’ websites, and the development of the Good Build Superstore.

The board said the first quarter of 2023 saw margin improvement, carriage cost control, overhead efficiency, and modest revenue growth in line with management expectations.

CMO Group said its key strategic priorities for 2023 included brand consolidation, integrating JTM Plumbing and Clickbasin into Plumbing Superstore, and Total Tiles into Tile Superstore.

The firm said its strong financial position and flexible banking partner, coupled with an undrawn working capital facility of up to £4m, ensured sufficient headroom for continued growth and development.

“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,” said chief executive officer Dean Murray.

“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 launch of Plumbing Superstores represents a significant addition to our portfolio of Superstores, and allows us this year to capitalise on our previous acquisitions of JTM Plumbing and Clickbasin.”

Murray said the new financial year had started in line with expectations, although the economic situation remained challenging, and the timing of recovery in consumer confidence was uncertain.

“As we continue to expand our Superstore portfolio and market leading product offer, the board is confident that its proven model will deliver value for shareholders in the short, medium, and long term.”

At 1000 BST, shares in CMO Group were down 1.4% at 21.2p

Reporting by Josh White for Sharecast.com.