Newly listed online furniture retailer Temple & Webster has a strong balance sheet and is on track to grow after a rocky year, its co-founder and boss Mark Coulter says.
The company, which is marketed as Australia's largest online-only furniture and homewares business, booked a pro-forma annual loss of $44.4 million in the year to June 30, compared to a $6.5 million loss made the previous year when it was a private company.
The loss was partly driven by non-cash impairments linked to its acquisition of two other online retailers, Milan Direct and Wayfair Australia last year. The latter was renamed Zizo Home.
T&W, which listed on the Australian share market in December, has been spending a significant amount of money on marketing in a bid to dominate the online furniture market.
That impacted the group's earnings but the reported $14.8 million loss in earnings before interest, taxes, depreciation and amortization met the company's revised guidance.
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"We are investing to win the market at this stage," Mr Coulter said.
"This is an opportunity to win over the customers while they are coming online. The plan was always to break even by 2018."
Mr Coulter said Australia's online sales in the $12.6 billion furniture and homewares sector remained small, at 4.1 per cent, compared to the US (10.5 per cent) and the UK (13.6 per cent.
He said Australia is likely to follow the US and UK and experience a growth in online furniture buying.
However, the company has cut jobs, reduced its operational and marketing costs after spending too much on marketing while first-time customers, a crucial online retail gauge, declined in the first half.
Mr Coulter said the marketing return on investment had improved, with a focus on digital marketing as oppose to more costly television and billboard advertisements, and first-time customer numbers have returned to growth in the final quarter of 2015/16.
Earlier this year, the group's financial woes led to a management upheaval with the chief financial officer Deborah Kelly leaving and company co-founder and chief executive officer Brian Shanahan quitting in March and April, respectively.
Mr Coulter stepped in as interim chief executive in April, not long after Mark Tayler was made interim chief financial officer. Both have said they are committed to saying with the company at least until 2018.
He said the company had a strong balance sheet of $18 million plus cash and zero debt.
Total sales amounted to $50.8 million, up from $26.1 million, boosted by the acquisitions.
T&W shares were down 1.5 cents to 17.5 cents at 1549 AEST, from an initial offer price of $1.10.
The share price plunged by more than two thirds in February after it warned it would miss its annual revenue and earnings forecasts.
TEMPLE & WEBSTER FY16 RESULTS:
* Statutory loss of $44.4m, compared to $6.5m in FY15
* Revenue up 95pct to $50.8 million, from $26.1m previously
* No dividend.
