Furniture trader Temple & Webster will charge into the Bunnings-dominated home improvement market as the online trader tries to continue record sales momentum.
Founder Mark Coulter on Wednesday outlined the opportunities in home improvement after he detailed a first-half sales boom of 46 per cent.
Plenty of sales growth remained in the core $16 billion furniture and homewares market, Mr Coulter said.
Yet the company has identified what it says is a complementary market, home improvement, and worth the same amount.
Company leaders are targeting young online-savvy adults who helped the business to record revenue of $235.4 million for the six months to December 31.
“Millenials who have grown up buying everything online are now buying homes and furnishing them,” Mr Coulter said.
“Soon they will be renovating them.”
The company is evaluating offering products for gardening, painting, window furnishings, flooring, plumbing and more.
The Wesfarmers-owned Bunnings dominates these categories and also enjoyed greater sales last year, helped by the east coast lockdowns.
Yet Mr Coulter claimed the next generation of consumers would favour shopping online.
Temple & Webster’s first-half sales increase was helped by greater spending on marketing.
However, Mr Coulter said a bigger promotional push was planned this year.
The company’s first-half performance included earnings before interest, tax, depreciation and amortisation improving by five per cent. This was more than the targeted range of two to four per cent.
Investors overlooked net profit after tax falling by 40 per cent to $7.2 million. This was blamed on the recognition of deferred tax assets.
Trade has been strong at the start of the second half of the financial year.
Sales were up 26 per cent from January 1 to February 6 compared with the same period last year.
RBC analysts Wei-Weng Chen and Chami Ratnapala said continued renovation trends should help the business.
However, consumers could also redirect some of their spending to travel since the lockdowns ceased.
Temple & Webster also has a trade and commercial division that targets corporate and hospitality customers, and offers design services. This grew by 49 per cent in the first half.
The company joined the exchange in 2015. Like many technology providers in their formative years, Temple & Webster is yet to turn a profit and pay dividends to shareholders.
Shares were higher by 10 per cent to $8.86 at 1539 AEDT.