CMO Group (CMO) , an online retailer of building materials, issued a trading update for the 7 months to July 31, 2024.
CMO reported improving sales in Q2 after seeing lower turnover in Q1, particularly in its tile business, attributed mostly to poor weather during the period. The upward sales trend and positive momentum in Q2, carrying into Q3, resulted in H1 sales of £30.3m, still down from £36.9m in H1 2023. July saw particularly strong performance in plumbing where LFL sales climbed 9.6%.
Likewise, average order value (AOV) improved in Q2 as consumer confidence recovered in larger RMI projects, in line with wider market trends. Group margins remained stable as CMO continued to focus on improving product margins, maintaining carriage cost recovery, and bringing its digital marketing spend to below 6%.
Cash at the end of H1 was £2.3m, with net debt of £2.5m and available facilities of £3.0m.
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CMO sales recovered significantly in Q2, ending H1 with £30.3m. While revenue still finished the half lower year-on-year, momentum is strong into July and Q3, with plumbing already in positive growth territory, and the other divisions not far behind. The group continued to maintain a sound balance sheet, with a comfortable cash position and available facility supporting further growth.
Momentum should continue into H2 given the strong signs of recovery in the repair, maintenance and improvements (RMI) market, as well as the recent interest rate cut - with more expected in coming quarters. CMO's 'Landscaping Superstore' also launched during the period, as well as its new 'Super Rewards' programme, aimed at enhancing customer loyalty.
The new products should further boost turnover in H2. Early indicators from 'Super Rewards' are particularly encouraging, with orders within the programme at c. double normal average order value (AOV) so far.
CMO shares climbed 11% on the update.
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