Building materials supplier CMO swings back to profit but 2023 sales are squeezed amid consumer pressure
- Sales down 10% in Q1 of 2023 amid ‘declining market’ and tough comparatives
- It made a pre-tax profit £175,000 for 2022, compared to a loss of £4.4m in 2021
- ‘The year ahead is no easier than it was last year’, chairman said
CMO Group swung back to profit in 2022, but the online building materials supplier has warned inflation continues to squeeze consumer spending.
The Plymouth-based company, which sells plumbing, heating and insulation products as well as tiles, doors and bathrooms, saw sales fall 10 per cent in the last quarter.
It put that down to a ‘declining’ market and tough comparatives with last year, though it pointed out performance was in line with expectations and that sales were 41 per cent higher than pre-pandemic.
CMO reported a 10% fall in sales in the first quarter amid a ‘declining market’
Although CMO expects growth to pick up in the second half, the group said this will be amid a ‘backdrop of ongoing market volatility’ and it remains ‘cautious’ given the current economic climate.
The group reported a pre-tax profit £175,000 for 2022, compared to a loss of £4.4million in the prior year, as revenues surged 9 per cent to £83.1million.
Chairman Ken Ford said: ‘At the time of writing, war in Ukraine is even more entrenched than 12 months ago, fuel prices and inflation have been at levels not seen for decades and consumer confidence, which saw a slight elevation at the tail end of the year, has returned to all-time lows.
‘Predicting the year ahead is no easier than it was last year, but I remain confident that the CMO team will again use its ingenuity, agility, and clear business model to create a sustainable and profitable, long-term future.’
The new financial year has begun in line with our expectations however the economic situation remains challenging and the timing of recovery in consumer confidence uncertain
The group, which serves tradespeople and homeowners, has been enhancing its offering of consumer-focused products like tiles and bathrooms.
It said its newly launched online ‘superstore’ aimed specifically at homeowners and selling everything from plasterboard to garden dining sets and accessories like door mats, was ‘progressing well’.
But while it continues to eye an ‘active acquisition pipeline’, it said it recognised ‘the need for cautious cash investment until the current economic climate improves’.
CMO shares fell 1.4 per cent to 21.20p in morning trade on Friday.
They have lost 85 per cent of their value since the company made its debut on London’s junior market in the summer of 2021 in an IPO at a price of 132p.
Chief executive, Dean Murray, said: ‘The new financial year has begun in line with our expectations however the economic situation remains challenging and the timing of recovery in consumer confidence 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.’
