News

1 Sep, 2021
Kogan shares dive as inventories crush profits
Financial Review

Kogan.com’s bloated inventories weighed heavily on full-year profits, but founder Ruslan Kogan said they could yet prove to be a blessing by helping the online retailer exploit an expected surge in sales during current COVID-19 lockdowns.

Shares in the former market darling dropped almost 16 per cent on Tuesday after the board suspended the final dividend to preserve cash as net profit plunged 87 per cent to just $3.5 million in the year to June 30.

Mr Kogan, who said in May when the blowout in inventories was revealed that people should do their Christmas shopping early to take advantage of discounts, said a return to pandemic buying could shrink the heavy stock levels that squeezed profits, giving shareholders hope of a swift resumption of dividends.

The retailer describes itself as a statistics company masquerading as an e-commerce company and uses complex algorithms to optimise inventory, pricing and promotions.

Yet Kogan ordered too much stock earlier this year in expectation the online spending boom triggered by the pandemic would continue.

1 Sep, 2021
Tech stocks shine as economic confidence wanes
Financial Review

Waning confidence in global economic growth drove the local technology sector to a record high on Tuesday, amid a rise in delta variant cases of COVID-19 that looks set to crush the tapering ambitions of the US Federal Reserve.

Technology stocks have dominated the gains on the local sharemarket this month, driven by a decline in bond yields and investors seeking returns outside economically sensitive sectors. These conditions are especially favourable to the valuations of businesses with little or no earnings.

While the benchmark S&P/ASX 200 Index has risen 1.6 per cent this month so far, the S&P/ASX All Technology Index has soared 13.5 per cent, hitting a record high of 3,192 on Tuesday, with gains from Afterpay, WiseTech Global, Appen and Xero driving the performance.

“It’s a combination of lower bond yields and investors looking for places to hide if things do go backwards again,” said Alphinity Investment Management principal Andrew Martin.

“In tech, you have companies which have their own growth story unrelated to the economy and investors can just focus on what that company’s doing, rather than the broader economic growth.”

In the past two weeks, the yield on the US 10-year Treasury has fallen by 8 basis points to 1.26 per cent and is now at similar levels to where it was in February.

Square’s $39 billion merger with Afterpay has been another key anchor of sentiment. “When the biggest stock in the index gets a big takeover bid, it’s going to help the rest of the sector,” said Mr Martin.

Iress has opened its books to EQT after the Sweden-based private equity firm made a $3.2 billion bid for the software provider, and Altium knocked back takeover interest from Autodesk last month.

While the gains in the technology sector have no doubt been driven largely by Afterpay, all but one of the tech stocks inside the S&P/ASX 200 Index have out-performed the broader market.

But investors have warned against piling into tech at these levels, saying sentiment, and not fundamentals, appears to be a driver of the current rally.

“The danger is tomorrow we’ll all get excited that [economic] growth is going to be okay and vaccines are working,” said Mr Martin. “It’s a dangerous game to play betting when those factors will turn.”

But the outperformance of tech hasn’t just been a local story: in the US, the tech-heavy Nasdaq Composite has risen 1.8 per cent in August while the more economically sensitive Dow Jones Industrial Average has risen just 1.2 per cent.

US COVID-19 cases are challenging the reopening euphoria, with seven-day average case numbers rising to the highest level since January.

“Sectoral composition has been a driver of the relative performance of stockmarkets throughout the pandemic,” said Capital Economics market economist Thomas Mathews, with pandemic winners and losers in mind.

“When investors have become more worried about the virus, stockmarkets of countries with high weights in coronavirus-sensitive sectors have struggled, almost regardless of the coronavirus situation in their economies. We think this will remain the case for some time.”

The annual Jackson Hole economic symposium taking place this week will set the tone for the rest of the year, as markets look for some certainty as to when the Federal Reserve’s planned reduction in bond purchases – or taper – will arrive.

A reduction in its $US120 billion ($168 billion) a month of buying is a necessary precondition to tightening policy settings.

The individual performance of some ASX stocks may vary over the next week too, with earnings season still incomplete. Four of the 10 largest companies on the S&P/ASX All Technology Index, including Afterpay, are yet to report.

 

 

 

16 Aug, 2021
One year on: how is the Catch and Target partnership going
SOURCE:
Ragtrader
Inside FMCG

It's been a year since Catch and Target announced their partnership together. 

The Wesfarmers-owned businesses teamed up to leverage each other's strengths; Catch opened Target up to its 1.5 million active customers, while Target gave Catch access to an extensive retail footprint. 

Additionally, the partnership gave Catch's customers a channel to click-and-collect their orders from Target, which brings additional footfall to the retailer. 

Speaking to Ragtrader, head of Catch Marketplace Steve Traplin said that one year on, the partnership is still delivering benefits for each brand. 

"We're a trusted eCommerce platform, an 'Aussie Battler' so to speak, and people do like shopping on it on our platform and we see that from the increased demand. 

"And our customers love Target and the Target brand, and they know what it's for.

"So bringing those together is good for us on our platform and therefore, it helps us with increased demand and excitement.

"And then from the Target perspective, what they're learning and getting better at is understanding how that footfall can work better for them, more and more and more each day," he said. 

However, the challenges of COVID meant the teams had to roll out new services to accommodate the health orders, Traplin explained.  

"In some cases, we had too many customers picking up at Target at the same time.

"So we introduced a booking system where you can book the time to pick up, and we've had to evolve into that and that includes Kmart as well," he said. 

Another challenge the partnership faced in the early days, was aligning the traditional and eCommerce retail calendars, Traplin said. 

"Target runs to a different cycle compared to what we do, so aligning calendars, aligning marketing calendars, aligning business rhythms, was a challenge that we had to overcome in the first six months.

"Now we've come to a really good place there and the winner out of that becomes the customer. 

"Because we understand when they're on sale in Target stores and they want to be exclusive that way, because that's the right criteria.

"Or then the sale is exclusive on our site because that's the right way from a strategy perspective.

"Or the sale is on and done at both. 

"So, they're using us to drive online, they're using us to drive footfall.

"And we're obviously loving, having the brand on our platform, because of just the customer excitement around it," he said. 

And while COVID may have forced all businesses to hyper-focus on the 'now' rather than the uncertain future, Traplin said that there are some key expectations for the partnership going forward. 

"The long-term view is: the relationship will get tighter and tighter, the customer experience will get better and better.

"The linkage between offers, and our joint marketing plans, I think there'll be a few more of those. 

"We'll broaden our selection, and we'll continue to do that.

"We'll continue to refine that every week because we know the products that work well, and we know the products that don't work well. 

"We will also focus on delivery experience, and the individual customer journeys - what you like and want to purchase from Target will be slightly different to what I do - and how do we resonate that make it more relevant for the end user?" Traplin said. 

6 Aug, 2021
Digital sales soar 11.6% in June while bricks-and-mortar takes a hit
SOURCE:
Ragtrader
Ragtrader

The clothing, footwear and personal accessory retail segment declined 9.5% in June, new data from the Australian Bureau of Statistics indicates. 

Driven by COVID-19 lockdowns introduced across the country, the fashion sector slipped $240.8 million in the month. 

By industry subgroup, clothing suffered the most in June, declining 11.1% (-$191.6 million), while footwear and personal accessories retailing fell 6.1% (-$49.3 million). 

Department stores also fell in June, declining 7.0% (-$118.6 million) in the month.

Australian Retailers Association (ARA) CEO Paul Zahra said that the figures reveal the struggles retailers face when lockdowns are introduced. 

"These figures are another sign of the pressures caused by recurring lockdowns, underlining the clear need to reinstate comprehensive support measures across the country as many businesses suffer without an adequate safety net in place.

"The June figures are just the tip of the iceberg, as they don’t yet reveal the blow caused by lockdowns in Victoria, WA and SA in July, current Southeast Queensland restrictions, or the prolonged Greater Sydney lockdown. 

"We also know that certain categories of retail performs better than others under lockdowns, and discretionary spending is likely to take a significant hit across this time.

"The Delta variant has so far put around $12 billion of retail trade at risk, with a billion dollars at risk each week in Greater Sydney alone," he said. 

As has been the trend during lockdowns, online sales rose in June, lifting 11.6% in the month. 

This increase follows falls of 4.5% in May and 4.1% in April 2021.

Meanwhile, retail sales volumes rose 0.8% in the June quarter, following a 0.5% fall in the March quarter. 

ABS director of quarterly economy wide surveys Ben James said that while fashion volumes rose in the quarter, department store volumes declined. 

"Households increased their discretionary spending for much of the quarter, with cafes, restaurants and takeaway food services (3.9%), other retailing (2.3%) and, clothing, footwear and personal accessory retailing (3.0%) all benefiting in volume terms. 

"Quarterly volumes were also impacted by lockdowns from May onwards, having a detrimental impact on department store volumes (-3.1%) in particular. 

"Despite a 0.4% fall in quarterly volume terms, food retailing benefited from lockdown-related sales in May and June," he said. 

Overall, Australian retail turnover fell 1.8% in the month of June, following a rise of 0.4% in May. 

The states which were under long periods of lockdowns in the month declined the most, with the largest falls coming from Victoria (-4.0%), New South Wales (-2.0%), and Queensland (-0.9%). 

5 Aug, 2021
Jack Dorsey’s Square to buy Afterpay in $39bn deal
The Australian

Buy now, pay later darling Afterpay has cemented its rise from an eBay side-project to one of Australia’s all-time tech success stories, with the company set to be acquired by US payments giant Square for $39bn in the largest deal in Australian corporate history.

Afterpay and Square — whose founder and chief executive Jack Dorsey is also the co-founder of Twitter — on Monday announced the all-scrip deal, under which Square will acquire all of the issued shares in Afterpay by way of a recommended scheme of arrangement.

The proposed deal values Afterpay at $126.21 per share, a 30 per cent premium to a last week’s closing price of $96.66 but below February’s highs around $158.

It implies an enterprise value of around 40 times the target’s estimated 2021 revenue and is expected to contribute to Square’s gross profit in the first year after completion.

Afterpay shares surged after news of the deal, soaring to $124.70 in early trade on Monday, before closing up 18.8 per cent at $114.80.

The $US29bn ($39bn) valuation is based on Square’s $US115bn market capitalisation on July 30 and Afterpay’s board has unanimously recommended the transaction, with co-founders Anthony Eisen and Nick Molnar to join Square when the deal completes.

“The transaction marks an important recognition of the Australian technology sector as homegrown innovation continues to be shared more broadly throughout the world,” Mr Eisen and Mr Molnar said.

Mr Molnar’s current stake of 6.87 per cent means the deal is worth $2.68bn for him, while Mr Eisen’s 6.72 per cent stake equates to a $2.62bn windfall.

Meanwhile, the news lifted shares across the payments sector on Monday, as Zip jumped 9 per cent, while Splitit jumped 8.7 per cent. Sezzle grew 3.7 per cent, Humm rose 3.7 per cent and Openpay lifted 4 per cent.

Following the deal, which is understood to have been struck after six weeks of discussion, Afterpay’s business will be folded into Square’s existing Seller and Cash App units.

It will expose Afterpay to a larger slice of the online global payments system, which Square forecasts to hit $US10 trillion by 2024.

Currently, the buy now, pay later sector accounts for roughly 2 per cent of online payments globally. However, Square expects that slice to grow by 10 per cent annually through 2024.

While Afterpay counts nearly 100,000 merchants and more than 16 million shoppers globally among its customers, that is dwarfed by Square’s reach of more than 70 million Cash App customers annually and millions of sellers.

Meanwhile, Cash App tools including money transfer, stock and bitcoin purchases will become available to Afterpay customers.

“The acquisition aims to enable the companies to better deliver compelling financial products and services that expand access to more consumers and drive incremental revenue for merchants of all sizes,” Mr Eisen and Mr Molnar said.

“By combining with Square, we will further accelerate our growth in the US and globally, offer access to a new category of in-person merchants, and provide a broader platform of new and valuable capabilities and services to our merchants and consumers.

They added that the deal was a milestone one for Australia’s technology ecosystem.

“It also provides our shareholders with the opportunity to be a part of future growth of an innovative company aligned with our vision.”

Mr Molnar said he and Mr Eisen will stay in the US and Australia respectively after the mooted deal closes.

“I’m currently in the US, and I’ve broadly been here the last three years, and Ant is in Australia. I don’t see a change to that,” he said in an interview. “Our goal is how we play a role in joining Square, in integrating our businesses into the seller and Cash app ecosystems to really unlock that strategic opportunity that’s in front of us. And to be honest, I couldn’t be more excited about what that represents.

“The more that we’ve gotten to know Jack [Dorsey], Amrita [Ahuja, chief financial officer], Alyssa [Henry, head of Square’s sales business] and Brian [Grassadonia, head of CashApp] and the entire Square leadership team, the more it’s become clear about our alignment, our ways of working and our joint belief in the opportunity in front of us. So, the ability to bring this partnership together is incredibly exciting.”

Market analysts also saw competitiveness in the combined business, with Citi saying it would place both Afterpay and Square’s Cash App and Seller businesses in a much stronger position to succeed, especially in the US.

“In our view the sale also reflects the increasing competition in the sector and the importance of scale, especially on the consumer side,” Citi analysts said in a research note.

They noted a structural trend towards BNPL and installment payments was still “in its early innings”, pegging Afterpay as the market leader.

Square, an American financial services and digital payments company based in San Francisco, was founded in 2009 by Jack Dorsey and Jim McKelvey. It offers merchants payment technology including contactless eftpos machines and devices and a cash application for peer-to-peer payments.

Square generates about 85 per cent of its revenue from the United States and Australia is its largest international market.

The Afterpay deal, its biggest ever, builds on an ambitious start to 2021, in which Square has also bought a majority stake in music streaming service Tidal -- for $US297m -- and announced a bitcoin business unit.

It also sets up a showdown in payments between Square and Apple, which is reportedly working on a similar “buy now, pay later” service known internally as “Apple Pay Later”.

In an interview, Square CFO Amrita Ahuja said the company has “long admired Afterpay not only for the industry attributes in which it operates, but because of this team, because of their execution, their discipline and their vision.

“In particular, Nick and Ant and their key management really are exemplary in terms of their entrepreneurial leadership, so we’re really excited that we get to work together,” she said.

Meanwhile, the deal is being hailed by Australia’s tech industry as one of the most significant for the sector in years.

Earlytrade co-founder Guy Saxelby described the acquisition as proof that Australian founders should hold on and keep growing, rather than cash out their billion dollar ideas early for only millions just because an offer is from the US.

“The $39bn value is unheard of at 75 times revenue which is basically Jack Dorsey saying he’s happy to wait 75 years to get a return on the investment,” he said.

“Afterpay is a stunning example of how Australian founder-led companies can make an impact on the global stage with great ideas and flawless execution.

“The Aussie tech scene has traditionally considered itself an R&D testbed for the US, where our founders sell-off their brilliant ideas and tough slog far too early and far too cheaply.

“We can take a more confident — more Australian — view of our position in the global tech scene.”

Liberal Senator Andrew Bragg, who chairs a Senate inquiry into Australia’s fintech industry, said he was “very concerned” about the ongoing consolidation of Big Tech, payments and financial services, and that “we want competition not concentration.”

“Consolidation risks should be assessed as part of the regulatory approvals,” he said.

Australia’s competition watchdog said it will “carefully consider” the merger.

“It is early days and this proposal has just been notified to us, so we will consider it carefully once we see the details,” an ACCC spokeswoman said.

5 Aug, 2021
‘Become digital or perish’: Atlassian reports ‘ripper’ quarter in tech boom
SOURCE:
The Age
The Age

Australian software juggernaut Atlassian is riding the tech boom, recording a 29 per cent rise in annual sales to $US2.1 billion ($2.84 billion) and flagging more growth to come. The news saw the company’s shares soar in after-hours trading, making its two founders billions of dollars richer overnight.

The Nasdaq-listed company on Friday reported fourth-quarter revenue of $US559.5 million, up 30 per cent on the same time last year as quarterly subscription sales jumped by 50 per cent to $US386 million. Co-founder and co-chief executive Mike Cannon-Brookes said it had been a “ripper” quarter for Atlassian, which had stayed its course during the COVID-19 pandemic and beat analyst expectations of $US524 million in sales.

Atlassian’s shares gained 13 per cent in after hours trading to $US301.60, giving the Sydney-based software firm an estimated market capitalisation of $US75.4 billion. Holding 22.7 per cent stakes, Mr Cannon-Brookes and co-founder and co-chief executive Scott Farquhar each saw their wealth on paper jump by $US1.96 billion ($2.66 billion) to around $US17.1 billion, respectively.

In addition to their shares in Atlassian, the pair also have substantial investments in property and in other technology companies through their private investment vehicles Grok Ventures and Skip Capital.

“If you think about the last year, in such a maelstrom, boneheaded moves are really easy to make, and we’ve kept our heads,” Mr Cannon-Brookes told analysts in a conference call discussing the results. “We’ve been very sensible about how we have made decisions throughout this last 12 to 18 months, and continue to focus on the long term and focus on our customers.”

The COVID-19 pandemic and switch to remote work has seen increased demand for Atlassian project management tools such as JIRA and Trello and document sharing platform Confluence, which enables collaboration across workplaces.

Atlassian narrowed its net losses to $US213.1 million for the fourth quarter, from $US385.2 million for the fourth quarter last year.

The tech giant hit 200,000 in customers and surpassed its target of hiring 1000 new staff for the year, adding 1500 new workers, the majority of whom have never met their manager or team mates in person thanks to the office closures in the pandemic.

The company expects its fast-paced growth trajectory to continue, providing a first-quarter forecast for revenue in the range of $US575 million to $US590 million.

In a letter to shareholders, Mr Cannon-Brookes and Mr Farquhar said Atlassian’s continued growth was being driven by the twin forces of digital transformation and the technology boom as companies moved online and migrated to the cloud.

“Every company will either become a digital company or perish,” they wrote in the letter. “Cheap capital is fuelling this once-in-a-lifetime technology investment boom.”

Analyst Josh Gilbert from eToro said Atlassian’s growth prospects were looking even better than the market had priced into its shares.

“As many knowledge workers continue to work remotely, the demand for versatile work tools surges, which is nothing but beneficial for Atlassian’s cloud products,” he said.

30 Jul, 2021
Meet the woman driving Spotify Australia’s push into podcasts
SOURCE:
The Age
The Age

Mikaela Lancaster is a self-described “big podcast fan” and since taking over as head of Spotify Australia last year, she’s been on a mission to extend the subscription service beyond music to audio more broadly.

“The vision for us is to really move towards an audio first company,” the 43-year-old says. “I have an ambitious but realistic goal for us to also be the leader in podcasts because we do have the audience here.”

Demand for podcasts is booming with accounting firm PwC reporting 25 per cent of Australians listened to at least one podcast a month in 2020, and Spotify has responded by increasing its offerings.

The number of podcasts on the platform, which was founded by Daniel Ek in Sweden in 2008, has increased from 490,000 in 2019 to 2.6 million in 2021.

“Unlike some of our competitors, it’s all in one place instead of two to three different apps,” Lancaster says. “It’s a different game for us than music. Music was, I suppose, an aggregator service where we have all the content and never really played in that exclusive space.

“On the podcast side, however, we’re starting to be more of a content company in that we’re choosing which exclusives, which partnerships to go after.”

The streaming service has signed exclusive deals with podcaster Joe Rogan worth an estimated $US100 million ($135 million) and locally with Casefile Presents, Emsolation with Em Rusciano and Extremes by VICE.

Spotify has been able to tap into its existing user base to grow the channel with the platform recording 356 million users globally -158 million of those were subscribers or paid premium users.

The streaming platform does not disclose the number of subscribers it has in Australia but research company Telsyte estimates 10.5 million Australians were using streaming music services at the end of 2020. It said Spotify was the largest service in Australia with 7.7 million users.

Lancaster’s aim is for Spotify’s push into audio to grow its audience further with about one quarter of the platform’s users globally using it to listen to podcasts.

“What we’re seeing is it’s not impacting music, so overall consumption on our platform is lifting,” she says. “People are choosing to listen to podcasts at different times to music, I think it’s just a behavioural shift.”

Lancaster started her career at Universal Music and says she’s always been interested in “the intersection of content and tech” having worked at Microsoft, Ninemsn, The Daily Mail and most recently as global marketing director at freemium video streaming service iFlix in Malaysia.

Emmanuel Frenehard worked with Lancaster at iFlix where he was the chief technical officer and describes her as a “bold thinker” who is good at coming up with disruptive ideas.

Frenehard says the challenge Lancaster faces at Spotify is convincing users the service provides value. “At the end of the day as a consumer you have a choice, you can spend $11.99 a month or you can decide it is not worth it,” he says. “Her challenge is to convince people to become paying subscribers and to maintain them long term so it becomes like electricity in your home, you don’t second guess that you need electricity.”

Lancaster hopes that by expanding Spotify’s reach beyond music, which she says is still “our core and our foundation” she can provide more value.

The platform has launched The Green Room, a live platform that creators can use to host their own rooms which Lancaster compares to the app Clubhouse, and Your Daily Drive, which is a mix of music and talk similar to traditional radio.

Listening time has increased since the coronavirus pandemic hit and Spotify’s share price has more than doubled. The company is listed on the New York Stock Exchange with a market capitalisation of $US46.45 billion ($62.3 billion).

While it is a public company, Spotify is circumspect about the money it makes in Australia with documents filed to the Australian Securities and Investments Commission (ASIC) showing Spotify’s Australian subsidiary reported $24.8 million in revenue from advertising in 2020 from the platform’s free service.

However, the bulk of Spotify’s income comes from its premium subscriber service and the streaming giant has shifted this revenue out of Australia and funnelled it through its head office in Sweden.

The company recorded no income from subscribers in Australia in 2020 despite reporting $129 million of “premium revenue” from local subscribers in 2016.

“I wasn’t privy to that decision or the mechanics behind it,” Lancaster says. “I’m here running the sales, marketing and content divisions but the financials are managed by our Swedish and local teams.”

Instead, Lancaster is focused on her audio goals.

“We want to be the destination for audio and the way I tend to think about it is you go to Netflix to watch, you go to Amazon to shop, and you go to Spotify to listen,” she says.

 

30 Jul, 2021
Lockdowns spice up Temple & Webster sales after record year
Australian Financial Review

Sales at online retailer Temple & Webster spiked in July amid fresh demand for fitness equipment and office furniture from consumers forced to work from home during the latest lockdowns.

The online retailer is a major beneficiary of the coronavirus pandemic, which triggered a cocooning trend and accelerated the shift in spending from bricks and mortar stores to e-commerce, and is one of several major retailers, including JB Hi-Fi, Harvey Norman and Super Retail Group, that have profited from the “lockdown lifestyle”.

“When people are locked down in their homes and not going to stores you see people gravitate towards our channel to a greater extent, there is an impact on sales,” co-founder and chief executive Mark Coulter said on Tuesday after revealing that unaudited earnings before interest, tax, depreciation and amortisation rose 141 per cent to $20.5 million in 2021.

Revenue growth in July accelerated to 39 per cent after rising 26 per cent in the June quarter, compared with 130 per cent in the June quarter 2020.

However, Mr Coulter does not expect growth to reach the heady heights of last year, even though the Sydney lockdown threatens to stretch on for at least another month.

“That (130 per cent growth last year) was a once in a generation increase given the lower base the year before,” Mr Coulter said. “Given that we are comparing such big growth rates last year we’re not forecasting those kinds of growth rates, but they’ll still be healthy.”

“Even when we’re not in lockdown we could still see growth on some pretty big numbers last year, which does suggest there’s a more permanent shift up the [online] adoption curve.”

Revenue for the year ended June 30 rose 85 per cent to $326.3 million as new and repeat customers spent money they would otherwise have outlaid on international travel on new sofas and dining suites, carpets, kitchenware, lighting and wall art.

Mr Coulter remains confident annual sales will reach $1 billion over time as online penetration in the $16 billion Australian furniture and homewares market rises from less than 10 per cent to 20 per cent or even 30 per cent and more Millennials buy and furnish their homes.

“Our goal is to become the largest retailer of furniture and homewares in Australia, which implies more than $1 billion [in sales],” he said. “But it will take a few years to get there.”

Temple & Webster shares rose 7 per cent to $12.45, the highest close since January, after growing almost fivefold, from $2.68 to $11.67, in 2020.

“It’s a fantastic result,” said Wilson Asset Management portfolio manager Tobias Yao.

“The key thing for us is the June quarter revenue number, which was 26 per cent growth on top of the 130 per cent growth this time last year – that is huge, it’s unique in the e-commerce space to comp triple digit numbers and hold onto gross profit margins,” Mr Yao said.

“We think Temple & Webster is the highest quality player in the e-commerce space and will continue to benefit from this seismic shift to online.”

Mr Coulter warned in April that profit margins would fall to pre-COVID-19 levels as the company invested heavily to take advantage of a “once-in-a-generation” shift to online shopping for furniture and homewares.

“We feel this is the time to be reinvesting some of this profit into growth to cement our market leadership,” Mr Coulter reiterated on Tuesday. “So when you think of furniture and homewares you think of Temple & Webster first rather than Ikea or Harvey Norman.”

The company, which is cashed up to the tune of $97.5 million, plans to spend more on marketing to build brand awareness, hire more staff, and invest in data analytics, artificial intelligence and augmented reality to convert more browsers to buyers.

It has invested $2.5 million, for example, into an Israel-based augmented reality start-up and is searching for potential bolt on acquisitions and partnerships.

The number of active customers rose 62 per cent to 778,000 in the year ending June and revenue per active customer rose 12 per cent to $426, underpinned by higher average orders.

Customer acquisition costs rose to $58 from $46, driven by a $3 million investment in television advertising to build brand awareness, and return on investment in marketing slipped to 2.3 times from 2.5 times in 2020.

EBITDA margins rose to 6.3 per cent from 4.8 per cent in 2021, boosted by sales of higher-margin private label products, which now account for 26 per cent of total sales.

However, the ‘contribution’ margin slipped from 15.3 per cent to 14.6 per cent (15.5 per cent before one-off distribution costs) after advertising and marketing costs almost doubled.

The company is targeting a 12 to 15 per cent contribution margin in the short to medium term to allow for additional investment and expects EBITDA margins to fall to between 2 per cent and 4 per cent, similar to those pre-COVID-19.

Jarden analyst Wassim Kisirwani said the results were broadly within expectations at the revenue level and slightly ahead at the earnings level.

“The confirmation of accelerating revenue growth against a tough comp base and a strong start to 2022 should allay concerns around near-term growth expectations,” he said.

Audited results, including net profit, will be released next month. No dividend was declared. Rather, the company is reinvesting profit into growth initiatives.

“The market is huge and they’re still only very small compared to the overall market and clearly their formula is working,” said Mr Yao. “So they should spend more of their profit investing in growth and taking market share while it’s there.”

30 Jul, 2021
Google will require employees on its campuses to get vaccinated as it delays its office return. It’s the first mega-cap tech giant to do so.
Business Insider
  • Google is pushing its return-to-office plan to October 18, it told employees on Wednesday.
  • The company had previously told employees they would be expected back in September.
  • Employees who do return will need to be vaccinated, the company said.

Google is delaying its return-to-office plans in response to a surge in coronavirus cases, the company announced on Wednesday.

Employees can continue to work from home through October 18, CEO Sundar Pichai wrote in a memo that Insider obtained. He also announced that employees who return to offices would need to be vaccinated against the virus.

Google recently reopened some of its offices for employees to return on a voluntary basis, but it said employees would not be required to come back until September. The rise in coronavirus cases driven by the more contagious Delta variant has pushed back that deadline by more than a month.

The company has more than 140,000 full-time employees, according to a recent regulatory filing.

“We are excited that we’ve started to re-open our campuses and encourage Googlers who feel safe coming to sites that have already opened to continue doing so,” Pichai wrote in the memo, which was later published on the company’s blog.

“At the same time, we recognize that many Googlers are seeing spikes in their communities caused by the Delta variant and are concerned about returning to the office. This extension will allow us time to ramp back into work while providing flexibility for those who need it.”

Google is the only tech giant so far to explicitly mandate COVID-19 vaccinations for its employees. Josh Lipton, a CNBC tech reporter, said in a tweet on Wednesday that Apple CEO Tim Cook was still unsure whether imposing the same rule at Apple was “the right answer.”

Apple also pushed its return-to-office date back to October in response to the surge in cases, The New York Times reported earlier this month.

Pichai said Google’s vaccination requirement would apply to US offices “in the coming weeks” and to other regions “in the coming months.”

Google has said that when employees do go back, it will increase flexibility around remote work, a response to employees’ pushing back on the company’s demand to have all employees back in its offices.

23 Jul, 2021
Former Auspost exec takes on role as Coles CTO
Inside FMCG

Former Australia Post exec, John Cox, is taking up a role at Coles as chief technology officer. Cox was previously AusPost’s executive general manager of transformation and enablement.

Cox is just one of several senior leaders at Australia Post who have departed from the company recently, which The Australian described as “a mass exodus”.

Two of the former employees have left to join former CEO Christine Holgate at Global Express – Michael Oates, former manager of mail services and Holgate’s former assistant, Vicki Ballantyne.

Meanwhile, AusPost’s general manger of customer solutions and partnerships Claire Burke is set to leave the company after almost 10 years and Michelle McNally, general manager of property is returning to her former employer, ISPT Super Property.

Chief risk officer Claire Hamilton is leaving for a similar role.

New Australia Post CEO Paul Graham is set to begin his role in September.

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