Building supplies firm hit by slump in demand

Earnings at online building materials firm CMO have been hit by the slump in the building and construction sector.

The Plymouth firm said earnings fell by £1m as a result of a fall in demand.

The company published  an update for the fourth quarter  and for the full year to the end of December.

CMO said the ongoing economic challenges have significantly impacted the construction sector and particularly discretionary spend in the repair, maintenance, and improvement sector.

The company said demand remains resilient but consumers shifted towards smaller projects driving, in a break from previous seasonal trends, lower than normal average orders values in the latter part of 2023.

While total sales for the full year to are expected to be broadly in-line at £71.5m compared to  £83.1m last year, full-year adjusted EBITDA is expected to be £1m compared to £2.1m, which is below previous guidance.

The group said it remains well financed with cash of £4.3m  and net debt of £1m.

CMO said it is making good progress with its flexible banking partner to strengthen the group’s available liquidity.

Chief executive Dean Murray said: “We are continuing to deliver on our strategy to disrupt the traditional market and our strategic priorities.

“Our success in launching vertically integrated websites, most recently landscapingsuperstore.co.uk, continues to drive penetration and takes advantage of our differentiated proposition with unrivalled breadth of product range, supported by expert customer service.

“With macro-economic headwinds continuing to impact the construction sector we proceed with caution for the outlook for FY24, but remain confident in our model and strategy to take the business forward, and our ability to deliver profitable progress.”