Online building materials retailer CMO Group has issued a warning over its annual earnings.
The Plymouth -headquartered business, announced its concerns citing "economic uncertainty" has a barrier in the construction and home repairs sector.
The company, which claims to be the UK's larges online-only retailer of building materials, said orders ad been lower than usual at the end of 2023 as homeowners shifted towards less profitable smaller building and repair projects. As such, sales for the year are predicted to fall by 14% to approximately £71.5m.
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CMO however, has warned that underlying earnings are now expected to drop to roughly £1m, from £2.1m in 2022. In August the company had guided for underlying earnings of around £2.5m.
Chief executive Dean Murray said: “With macro-economic headwinds continuing to impact the construction sector, we proceed with caution for the outlook for 2024, but remain confident in our model and strategy to take the business forward, and our ability to deliver profitable progress.”
But CMO said that, despite the disappointing last quarter, it had successfully delivered on some key strategic priorities, including improving product margins and carriage cost control.
Britain’s construction sector has been under pressure after interest rates have been raised to levels not seen since the 2008 financial crisis, with the Bank of England pushing through 14 increases in a row until finally pausing in September last year.
Figures from a closely-watched industry survey last week signalled that the construction sector is still in contraction. The S&P Global/CIPS construction purchasing managers’ index scored 46.8 in December, up from 45.5 in November. Any score that is lower than 50 means that the sector is contracting.
