Online retailer Kogan was yet another to confirm changed guidance for the year to June – this time on the upside (compared with the downgrades for BlueScope and loss for Lendlease).
In fact, the coronavirus pandemic and its boost to online retailing has proven to be the making of Kogan.
Kogan’s strong results were not unexpected, as the company has been updating investors regularly on its monthly sales performance throughout the pandemic, which have surged thanks to the economy-wide work-from-home spending boom.
Kogan, which only has its online-only retail platform, increased its revenue by 13.5% to $497.9 million compared to the prior year.
Gross sales, which includes all sales made through the company’s third-party platforms, rose nearly 40% to $768.9 million.
That was far more than the $600 million figure provided by the much larger JB Hi-Fi yesterday in its full-year results.
Net profit after tax rose 55.9% to $26.8 million. Kogan’s earnings before interest and tax (EBIT) totalled $39.1 million just short of market forecasts of $40.8 million.
Total active customers topped 2.18 million in the year, up 35.7% on 2019.
CEO Ruslan Kogan said the results were an indication of the strength of Kogan’s business considering the “extremely turbulent and challenging period”.
“There is a retail revolution taking place as more and more shoppers learn about the benefits of e-commerce. We’re seeing record numbers of first-time customers, who then go on to make repeat purchases at a 40 percent faster pace than previously,” he said.
“For us this is a very exciting trend that shows that once customers learn about shopping online, they change their ongoing behaviour,” Mr. Kogan said in yesterday’s statement.
Kogan’s nascent third-party marketplace platform, which it established just last year, continued to perform, with gross sales rising over 70 percent to $100 million across the second half of the year.
Kogan said sales through July continued to rise, up 110% compared to last year, with adjusted earnings for the month upwards of $10 million.
A final dividend of 13.5 cents a share was declared, an increase of 64.6% on the year prior’s final of 8.2 cents a share. With the 7.5 cents a share final, the total for the year is 21 cents, up nearly 50% from the 14.3 cents for 2018-90
Kogan said that at June 30 it had cash of $146.7 million, and an undrawn bank debt facility of $30.0 million. “This cash balance excluded the $20.0 million share purchase plan proceeds which were received in July.”
Investors gave the results the thumbs down – Kogan shares lost 6% to $20.51.
Fickle mob investors, but a bit of profit-taking never hurt a well-based share price.
