A cost-cutting strategy by Temple & Webster (ASX:TPW) appears to be paying off after the online furniture and homewares retailer posted a small underlying profit in the second half of FY18.
The company, in it fourth-quarter cashflow statement, has revealed an unaudited EBITDA of $300,000 for the half year.
The result makes good on a forecast from co-founder and CEO Mark Coulter (pictured) two years ago that the company would be in profit this calendar year.
Temple & Webster posted a net loss of $900,000 in the first half of FY18, well down on a $5.4 million loss a year earlier.
Over the past year the company has focused heavily on slashing expenses, and this is reflected in the cost of servicing each customer falling to $54 from $58 in the first half of FY18.
The latest operating result has also been buoyed by a 24 per cent boost in revenue.
Among the highlights of the latest half year is a 25 per cent increase in the number of active customers on the company's website to 198,000, while 44 per cent of orders have come from repeat customers.
"Two years ago, we promised our shareholders we would reach profitability during calendar year 2018 without having to raise additional capital, and I am proud to say that we achieved this goal," says Coulter.
"Our strong growth in both active customers and revenue, combined with the hard work that we have already completed on our cost base and margins, has led to the first profitable half in Temple & Webster's short history.
"Our strategy of being a category specialist, with a clear customer offering built around the largest range of furniture and homewares in the country, combined with the most inspirational content and the best customer service is working."
Coulter says the online market for furniture and homewares is still in its infancy with just 5 per cent of purchases currently made online.
"We are well placed for strong growth for years to come," he says.
Temple & Webster had a cash balance of $9.9 million at the end of June and produced net cashflows of $600,000 in the fourth quarter of FY18.
The company is expected to deliver its audited full-year results on August 18.
Temple & Webster shares jumped 7 per cent to 77c on the news.Never miss a news update, subscribe here. Follow us on Facebook, LinkedIn, Instagram and Twitter.
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