Building materials supplier CMO is making a profit again, but sales in 2023 are under pressure from consumers
- Revenue down 10% in Q1 of 2023 amid ‘declining market’ and difficult comparatives
- It posted a pre-tax profit of £175,000 for 2022, compared to a loss of £4.4m in 2021
- ‘The coming year will not be easier than last year,’ said the chairman
CMO Group returned to profits in 2022, but the online building materials supplier warned that inflation will continue to weigh on consumer spending.
The Plymouth-based company, which sells plumbing, heating and insulation products, as well as tiles, doors and bathrooms, saw sales fall 10 percent in the past quarter.
It attributed that to a “declining” market and difficult comparisons to last year, though it pointed out that performance was in line with expectations and sales were 41 percent higher than before the pandemic.
CMO reported a 10% drop in revenue in the first quarter amid a ‘declining market’
While CMO expects growth to pick up in the second half, the group said it will do so against a background of continued market volatility and remains “cautious” given the current economic climate.
The group reported a pre-tax profit of £175,000 for 2022, compared to a loss of £4.4m the previous year as revenues rose 9 per cent to £83.1m.
Chairman Ken Ford said: “At the time of writing, the war in Ukraine is even more entrenched than it was 12 months ago, fuel prices and inflation are at levels not seen in decades and consumer confidence, which saw a slight increase in the end of the year has returned to an all-time low.
“Predicting the year ahead is no easier than last year, but I am confident that the CMO team will once again use its ingenuity, agility and clear operating model to create a long-term sustainable and profitable future.”
The new financial year has started in line with our expectations, but the economic situation remains challenging and the timing of the recovery of consumer confidence is uncertain
The group, which serves retailers and homeowners, has been improving its range of consumer-oriented products such as tiles and bathrooms.
It said its recently launched online ‘superstore’ aimed specifically at homeowners, selling everything from drywall to garden sets and accessories such as doormats, was ‘progressing well’.
But while it continues to follow an “active acquisition pipeline,” it said it “recognizes the need for prudent cash investments until the current economic climate improves.”
CMO shares fell 1.4 percent to 21.20 p in morning trading on Friday.
They have lost 85 per cent of their value since the company debuted in the London junior market in the summer of 2021 in an IPO at a price of 132 pence.
Chief executive, Dean Murray, said: ‘The new financial year has started in line with our expectations, but the economic environment remains challenging and the timing of the recovery in consumer confidence is uncertain.
“As we continue to grow our Superstore portfolio and market-leading product offerings, the Board is confident that the proven model will deliver value to shareholders in the short, medium and long term.”