LONDON - CMO Group (LON:CMOC) PLC, the UK's leading online-only building materials retailer, provided a mixed trading update for the fourth quarter ending December 31, 2024, and shared its full-year expectations. Despite a challenging market environment, the company anticipates a significant improvement in its second-half earnings before interest, tax, depreciation, and amortization (Adjusted EBITDA) compared to the same period in 2023.
The Group has seen an increase in its share of the online Builders Merchant Market and has improved the recovery of carriage costs by 25%, adding to the 56% improvement seen in 2023. Operational efficiencies and cost-saving measures have led to savings of approximately £1.7 million for the year, with the Building division experiencing a year-on-year margin rate improvement of 4.5%. Additionally, the Tiles division has become margin positive despite a 17% market decline year to date.
However, the soft market conditions in Q4, exacerbated by a drop in consumer confidence following the new government's budget announcement, have led to a revised full-year 2024 revenue forecast of £62-63 million, down from £71.5 million in 2023. Adjusted EBITDA for the full year is expected to be between £0.5-0.7 million, a decrease from the previous year's £900,000.
Dean Murray, CEO of CMO Group, acknowledged the impact of the recent government budget on the trading environment but expressed pride in the management team's efficiency measures. He stated that these efforts are expected to yield a considerable year-on-year EBITDA growth for the second half of the year. Murray also noted the resilience of their business model, as evidenced by the growth in market share, and expressed confidence in the company's preparedness for future growth.
Net debt is projected to be £5 million at the end of November, with the company maintaining a strong focus on cash management and cost control. The announcement, which contains inside information, is now considered public following its release.
This trading update and outlook are based on a press release statement from CMO Group PLC. The information provided is subject to the inherent risks and uncertainties that could cause actual results to differ materially from those projected. CMO Group PLC has not committed to updating or revising any forward-looking statements outside of legal and regulatory obligations.
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