ASX:TPW
Temple & Webster Group Ltd
Investment Summary
The fund managers believe that Temple & Webster Group Ltd (TPW) has demonstrated strong operating leverage and achieved impressive results, as indicated by its recent performance. In their opinion, the company’s standout 1H25 earnings reveal a surprising EBITDA margin of 4.2%, surpassing expectations and indicating the potential for continued growth. While revenue growth was steady, the overall results were deemed hard to fault, highlighted by record sales and customer engagement. Several managers opted to trim their positions amidst a rapid share price increase of over 60% in three months, viewing the current valuation as stretched. They remain optimistic about re-entry opportunities and will keep a close eye on the company's progress towards achieving its target of $1bn in revenue. Overall, the consensus reflects confidence in TPW’s business model while recognizing the need for prudent capital allocation.
Commentary From The Managers
Ten Cap
28 Feb 2025
$17.23
- Temple and Webster (TPW) delivered a standout result.
- Demonstrated strong operating leverage with significant top line growth.
- Ten Cap continues to like the business model.
- Utilised the strong performance post result to trim their position.
- Capital has been deployed into new ideas.
Ten Cap
28 Feb 2025
$17.23
- Ten Cap initially held a high-conviction position in Temple & Webster (TPW) prior to the reporting season.
- They utilized a significant multiple re-rate to trim their holding.
- Despite this action, Ten Cap remains optimistic about the business and the consumer sector.
- They are keeping a close watch for potential re-entry opportunities.
Blackwattle Investment Partners
28 Feb 2025
$17.23
- Temple & Webster is Australia’s leading online furniture and homewares retailer.
- Shares rose 20.0% in February after achieving a 1H25 result that beat analysts’ expectations.
- Revenue growth was roughly in-line, but the company delivered a surprise EBITDA margin of 4.2% above the full year guidance of 1-3%.
- This margin will help fund marketing efforts in 2H to continue compounding sales growth and market share gains.
- The result included record sales, active and repeat customers, and conversion rates.
- Temple & Webster remains on track to achieve its medium target of $1bn in revenue.
- However, the valuation is now stretched after a +60% rally in 3 months.
- Blackwattle Investment Partners has taken the opportunity to lock in some profits.
Please note: The completeness, accuracy or current status of the investments referenced are not guaranteed.