3 ASX stocks under the spotlight – Kogan, Webjet, and Temple & Webster

Summary

  • Kogan, Webjet And Temple & Webster have been among the companies to have created a significant buzz in the market this month.
  • com gained market attention following the release of its Q3 FY2021 numbers with impressive growth in revenue, EBITDA, and the number of active customers.
  • Webjet confirmed the settlement of 50 million Convertible Notes due 2026 to repay its existing debt.
  • Temple & Webster Group reaffirmed its strategy to switch from offline shopping to online shopping, looking at the customer behaviour pattern.

Kogan, Webjet And Temple & Webster Group were amongst those companies which created a huge buzz in the market following the recent announcement made by these companies during April 2021.

Australian retailers Kogan and Temple & Webster Group were in the limelight following the respective release of their trading updates. Their peer Redbubble Limited (ASX:RBL) also reported solid quarterly results.

Webjet (ASX:WEB) shares have been under the spotlight since the beginning of April 2021. Recently, the Company announced the settlement of 50 million Convertible Notes due 2026. The proceeds would be used to pay Webjet’s existing term debt.

The Australian retail stocks are having a difficult today with some of the major players, including Wesfarmers Limited (ASX:WES), Woolworths Group (ASX:WOW), Coles Group (ASX:COL), Harvey Norman Holdings (ASX:HVN) and JB Hi-Fi (ASX:JBH) trading in the red zone during the afternoon session.

On that note, let us look at the three companies - Kogan, Webjet And Temple & Webster Group - and their key updates.

Kogan.com Limited (ASX:KGN)

On 23 April 2021, Kogan.com Limited provided its business update for Q1 CY2021 (Q3 FY2021). The Company continued its long-term strategy of investing in technology, brand awareness, logistic capability platform upgrades, and Kogan First membership advantages to set the base for future growth and offer constant enhancements in client experience.

Source: © Bakhtiarzein | Megapixl.com

3Q FY2021 Highlights Across the Group:

  • Gross Sales improved by more than 47%.
  • Revenue increased by over 65%.
  • Gross Profit grew above 54%
  • Adjusted EBITDA was down by over 24%.
  • Active customers increased by over 77% to 3,215,000 for Kogan.com.
  • In Mighty Ape, the active customers reached 742,000.

Development during the Quarter:

In the three months to March 2021, customer demand was below the levels seen in the previous nine months to December 2020. Because of this, KGN was required to store more than projected levels of inventory. It resulted in high storage expenditures and demurrage fees. The situation is expected to resolve from May 2021.

The Company is optimising the inventory position to reflect existing market situations by improving its promotional activity.

Outlook:

KGN expects a brighter future in the upcoming period as the business has witnessed growth in the active customer base and investment in key strategic initiatives. Besides, the Company saw a strong in-demand inventory level towards the end of the financial year and Christmas trading periods while witnessing price inflation via the global supply chain. 

Webjet Limited (ASX:WEB)

Concerning the announcement dated 31 March 2020 and 01 April 2021, Webjet Limited, on 12 April 2021, announced the settlement of 50 million Convertible Notes due 2026.

The New Notes were listed on the Singapore Stock Exchange on 13 April 2021. Webjet also got conversion notices for EUR100 million of its active 2.50% Convertible Notes due 2027 under the Conversion Invitation related to Offering on 31 March 2021. Consequently, the Company issued 39,682,298 ordinary shares. The Company would pay ~AU$33.295 million to holders of the Existing Notes via cash.

Use of the net proceeds

The Company intends to use the net proceeds from the offering to repay its existing term debt. The funds would also support potential acquisitions, capital management and general corporate purposes.

DO READ: What Is Making News At ASX 200 Today?

Temple & Webster Group Ltd (ASX:TPW)

On 20 April 2021, Temple & Webster Group Ltd, the largest pure-play online retailer in the furniture and homewares market in Australia, provided a trading update and reiterated its plan.

During 2H FY2021, till the announcement, the Company witnessed robust trading and saw a shift in the shopping behaviour of the customer. Considering the changing trend, the Company reaffirmed its investment plan to capitalise on its move from offline shopping to online shopping in the furniture and homewares group.

Trading Update:

Despite the COVID-19 impacts, TPW’s trading exceeded its expectation.

  • Q3 FY21 Revenue up 112% as compared to the prior corresponding period.
  • The number of active customers reached nearly 750,000 by the conclusion of Q3 FY2021.
  • The revenue during April 2021 was over 20% on pcp.

Upcoming growth Strategy:

  • The Company would focus on creating strong brand recognition to reach national brand status in the next three years. It would achieve this via investment in mainstream media to drive the first time and repeat clients.
  • TPW would use tactical pricing and promotions to improve conversion.
  • The Company would strengthen the customer experience via improved technology, data & personalisation, along with distribution experience.
  • TPW plans to invest in its 3D and AI potential to make consumer shopping simpler.
  • The Company would further work upon distinguishing its variety through new category add-ons, private label extension, new product development coupled with releasing exclusive ranges.
  • Grow its B2N sales as well as operational teams to capitalise on restoring demand in the commercial segment.

INTERESTING READ:  Temple & Webster (ASX:TPW) declares impressive H1 FY21 results amid COVID-19 challenges

Stock Information (as of 26 April at AEST 12:30 PM)

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