ASX News Live | ASX Ends 0.58% Higher; BHP, Seek, Temple & Webster Release Results

In its FY22 accounts, online furniture retailer Temple & Webster pointed to ‘cyclical headwinds’ and difficulty in year on year comparisons due to lockdowns.

TPW said July trading was down 21% YoY while August (to the 14th) was trading 17% down YoY.

Interestingly, Temple & Webster said these figures are coming in ahead of its internal estimates.

The retailer expects a return to month-to-month ‘double digit growth during FY23 once we finish lapping COVID lockdowns from the year before.’

Temple & Webster shares closed 29% higher on Tuesday.

Aussie online furniture retailer Temple & Webster Group Ltd [ASX:TPW] surged on Tuesday, ending the day almost 30% higher after the market looked favourably at the retailer’s FY22 accounts.

• Revenues rose 30.6% to $426.3 million
• Active customers rose 21% to over 900,000
• Profit after tax fell 14.2% to $12.0 million
• EBITDA margin of 3.8%

Temple & Webster attributed the profit decline to its ‘reinvestment strategy’, which involved investing in ‘people, technology, logistics, and product.’

While revenue has grown 55% on a 2-year CAGR, profit before tax — TPW’s preferred measure — rose 28.6% on a 2-year CAGR.

In absolute terms, TPW boosted its revenue 140% from FY20 to FY22. In the same period, profit before tax rose 60%.

TPW management was pleased with the FY22 performance but told shareholders the results are ‘just a fraction of what we can achieve as the online market for furniture and homewares continues to grow.’

TPW management argued that Australia’s total furniture and homewares market is worth about $16.5 billion but only 16% has moved online.

Management pointed out that Australia’s furniture and homewares online penetration lags behind the US, where the online penetration is at 30%, ‘with significant growth ahead of it.’

Based on these figures, Australia’s furniture and homewares online market could be worth around $2.5 billion.

Meaning that TPW’s FY22 revenue accounted for 17% of the online market.

TPW CEO, Mark Coulter, was upbeat about his company’s performance but did suggest FY23 results will be volatile:

“Although FY23 year-on-year growth will be volatile as we finish lapping COVID impacted numbers in FY22, our strategy remains consistent. Through our growth initiatives, we aim to maximise growth as well as to improve profit margins. This will be done through our ongoing program of margin improvement and cost base management, and phasing of longer-term investments.”

The retailer ended the year with $101 million in cash, up from $97.5 million in FY21. While FY22 revenue rose 30.6%, free cash flow fell 75% to $5.5 million.

Temple & Webster is currently trading at a P/E ratio of around 100, as investors remain willing to pay up for growth.

We’re much more environmentally conscious these days.

We recycle.

We bring our own bags to the supermarket.

We deck our roofs with solar panels.

Some of us bring reusable coffee cups to our local cafes.

But despite this suburban environmentalism, the world still relies heavily on fossil fuels to function.

In fact, while coal consumption has levelled off in recent years, oil and gas consumption hasn’t.

As Oxford University’s Our World in Data noted:

‘Fossil fuel consumption has increased significantly over the past half-century, around eight-fold since 1950, and roughly doubling since 1980.

‘But the types of fuel we rely on has also shifted, from solely coal towards a combination with oil, and then gas. Today, coal consumption is falling in many parts of the world. But oil and gas are still growing quickly.’

Whether we’re aware or not — and whether we like it or not — our world runs on fossil fuels.

Oil, natural gas, and coal still account for about 80% of the world’s primary energy inputs.

And while these inputs may be a small fraction of global GDP, they support all other economic activity.

Read full article here.

https://www.moneymorning.com.au/20220816/ditching-fossil-fuels-in-the-energy-transition-wont-be-easy.html

The fallout of 4DS Memory Ltd [ASX:4DS] reporting ‘unexpected problems’ related to recent testing of its non-volatile memory technology extends beyond the steep share price drop.

With 4DS shares are currently down 65% to multi-year lows, the firm notified that its managing director Ken Hurley will leave the company ‘effective immediately’.

4DS elaborated:

“Ken was engaged for the specific purpose of leading the Company’s commercialization effort, but due to the delays foreshadowed above, the Company believes that his expertise would be more useful to the Company once the Company is further developed in the commercialisation of its technology. Ken has agreed to re-engage with the Company when it is ready to start the commercialization effort. The Board thanks Ken for his contributions over the past five months.”

4DS also announced that all board members, including the executive chairman and executive director, will defer fees for three months to conserve cash reserves.

 

Semiconductor development company working on non-volatile memory technology, 4DS Memory Ltd [ASX:4DS], is down 65% on Tuesday after testing of memory cells showed ‘unexpected problems.’

Having previously resolved a problem with electrical shorting of the memory devices, 4DS flagged the current issue has created a new problem.

The company is now conducting a root cause analysis with further electrical testing.

4DS admitted:

Until this issue is resolved, endurance and retention testing of the memory cells with imec access transistors, the primary goal of this Third Platform Lot, cannot be successfully completed.

In a frank admission which likely exacerbated the sell-off, 4DS said the testing problems may lead to ‘long-term delays’ to its commercialization ambitions.

The Company believes that the recent results from the Third Platform Lot will likely cause a long-term delay in achieving its strategic goal of commercializing the Company’s technology.

 

Sezzle’s (ASX:SZL) latest half-yearly report shows that the BNPL stock’s total accumulated losses now stand at US$170.5 million.

SZL is currently trading at a market cap of $165 million.

The accumulated losses mean Sezzle now operates with total stockholders’ equity of just US$150,000 on total liabilities of US$160 million.

#BNPL stock $SZL is currently down 10% after 1H22 income only rose 6.5%.

SZL said its slower income growth was driven by a 'strategic shift in 2022 to focus on profitability over top-line growth.'

– UMS up 10.6% to US$869.6m
– Active customers up 18.2% on 1H21 to 3.4m

— Fat Tail Daily (@FatTailDaily) August 16, 2022

 

BNPL stock Sezzle (ASX:SZL) is currently down 10% after releasing its half-year results, showing modest total income growth.

• Underlying merchant sales rose 10.6% on 1H21 to US$869.6 million
• Active customers rose 18.2% on 1H21 to 3.4 million
• Total income up 6.5% to US$56.9 million

SZL said its slower income growth was driven by a ‘strategic shift in 2022 to focus on profitability over top-line growth.’

Regarding profitability, Sezzle posted a half-year net loss of US$43.3 million, up from a net loss of US$29.9 million in 1H21.

Sezzle’s operating expenses for the half totalled US$98.6 million.

While the BNPL stock said it shifted its strategy toward profitability in 2022, Sezzle did ramp up marketing and advertising spend in the half, from US$3.4 million in 1H21 to US$11.5 million in 1H22.

Sezzle’s notes receivable shrunk 33% to US$89.4 million from US$134.0 million.

Sezzle now owns more in merchant accounts payable (US$85.3 million) than it has in cash and cash equivalents (US$62.1 million).