Plymouth Marketing Director buys digital plumbing retailer in £ 5.7million deal
Plymouth-headquartered online building materials retailer CMO Group Plc has bought a plumbing company for £ 5.7million – and is considering further acquisitions.
CMO, which saw its sales increase 63%, agreed to terms to take over Darlington-based JTM Plumbing Ltd, a digital retailer of plumbing and heating supplies in a cash purchase.
This new business will be marketed under the domain name plomberiesuperstore.co.uk and brings CMO into the new category of online plumbing and heating.
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This comes just seven months after the acquisition of Fast Growth 100 Total Tiles, and CMO chief executive Dean Murray said the company has plans for further expansion.
He said: “We have grown organically and through acquisitions and that remains our strategy. We will continue to add products and services and are considering further acquisitions.
“We are constantly looking in the market for what will work, companies that look like us, that are purely online and with a similar ethic. “
The initial growth will continue with the release of the CMO Trade App later this year, a B2B application for people in the construction industry, with Mr. Murray stating, “This will put all of our services to craftspeople in their hands via one. smartphone. “
CMO is now the UK’s largest online building materials retailer, and its unaudited interim results for the six-month period ended June 30, 2021 show a 63% increase in revenue to £ 38.2million sterling (H1 2020: £ 23.4m), reflecting strong organic growth and the £ 8.8m contribution from the acquisition of Total Tiles.
Gross margin increased to £ 7.4m (H1 2020: £ 3.4m) and Adjusted EBITDA (earnings before interest, taxes, depreciation, amortization, exceptional charges and acquisition costs) increased to £ 2.0million (H1 2020: £ 0.8million).
Mr Murray explained that the company prefers to highlight EBITDA, a measure of profitability, rather than pre-tax profit, which has risen to £ 0.5million (H1 2020: £ 0.7million sterling loss), as it measures cash generated and excludes finance charges.
CMO was backed by private equity and therefore had interest payments to pay, but the company is now owned by its shareholders after the completion of a successful IPO on the Exchange’s AIM, which raised more of £ 27million.
“We are now listed and have paid off all the loans we had for our previous growth,” said Murray.
CMO operates seven specialty websites: Roofingsuperstore.co.uk, Drainagesuperstore.co.uk, Insulationsuperstore.co.uk, Doorsuperstore.co.uk, Tileandfloorsuperstore.co.uk, cmotrade.co.uk and Totaltiles.co.uk. Its sites list more than 75,000 products.
It started out as a small company based in the Plymouth Airport Business Park, but after compounding 43% growth over previous years, it now has a large head office in Burrington Way, where most of its 200+ employees are based.
The company said its market remains buoyant and the group is managing industry headwinds well with the hope of generating double-digit sales growth in line with expectations for the full year.
Mr Murray said the company was not immune to the current supply issues affecting the UK industry, but said: ‘Our online-only drop shipping model puts us in the best position to cope. to that. We do not have stock stored across the country and can offer a wide range of products and therefore offer substitutes more easily. “
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He added, “I would like to take this opportunity to extend a warm welcome to our new investors who joined the IPO in July and to thank all of our colleagues for their hard work and continued engagement at this time. I am delighted to report a solid set of results that meet the expectations set during the IPO. Our strategy is to take advantage of the online channel change and low penetration of internet-based sales in a huge and evolving market, augmented by our lightweight products drop shipping model.
“I am also delighted to report a positive contribution from Total Tiles and the team during their first six months of activity within the larger CMO group. The current challenges facing our industry are well documented, but we are managing them well and remain confident in pursuing double digit sales growth in the second half of the year to meet the expectations of the Board of Directors.