Kogan.com (ASX:KGN) Continues the Momentum in Sales and Earnings 

  • November 20, 2020 12:51 PM AEDT
  • Hina Chowdhary
    Hina Chowdhary
    Director, Equities Research Hina Chowdhary
    1706 Posts

    Hina Chowdhary is the Director, Equity Research at Kalkine and has an extensive experience of about 15 years in the area of Research, which includes 5+ years in Equities Research particularly.She has earned a Master of Science degree from the renowne...

Kogan.com (ASX:KGN) Continues the Momentum in Sales and Earnings 

Summary

  • FY20 has been a watershed moment for the e-commerce giant Kogan.com.
  • Over the past 12 months, one in eight adult Australians shopped on Kogan.com. 
  • First four-month period of FY21 has continued the growth in sales and earnings, while the company is investing in marketing to gain customers. 

Kogan.com Ltd (ASX:KGN) is convening its Annual General Meeting today. Chairman Greg Ridder highlighted that the e-commerce company supported its clients through a tough period, which was overshadowed with bushfires, drought and the pandemic. 

FY20 in Review 

Over the last one year, one in eight Australian adults have shopped from Kogan.com. During FY20, the company improved its penetration in the Exclusive Brands category, while Kogan Marketplace and Third-Party Brands also performed well. 

Kogan forayed into the furniture market after the acquisition of Matt Blatt earlier this year for $4.4 million, combining the Matt Blatt experience with the leading technology. 

At the end of FY20, the company had no debt and an undrawn debt facility of $30 million. It declared total dividends of 21 cents per share, which were up by 46.9% over the previous year. Likewise, EPS grew 61.1% over the previous year. 

CEO Ruslan Kogan stated that they had built a resilient business over the years. Despite continued investment in marketing and platform, the company achieved record growth in gross sales, gross profit and adjusted EBITDA

Kogan.com projects itself as a customer-centric company. It also noted that its ability to evolve according to customer demand strengthens Kogan’s competitive advantage. 

In FY20, Kogan.com sold goods to around 2.2 million customers. More importantly, its platform only represents around 3% of Australian retail trade. 

Exclusive Brand strategy continues to underscore the resilience of the strategy with revenue growth of 34.1% over the year in 2H FY20. 

Growing sales depict Kogan’s large customer base, proprietary systems to detect consumer demand and act accordingly. Over the past 15 years, it has also built a loyal, active customer base. 

Kogan.com continues to make data-driven decisions in its business processes, especially in capital allocation and inventory. 

In the second half of FY20, the company also saw decent growth in Kogan First. The company has expanded margins over the past four years substantially. Its greatest marketing investing coincided with the greatest profitability. 

November Trading Update

In FY21 to October 2020, the company continued growth in gross sales, gross profit and adjusted EBITDA. In this period, growth in gross profit outpaced the gross sales growth, underpinned by the Marketplace and Product divisions. 

During the period, its gross sales grew 99.8%, gross profit surged by 131.7% and adjusted EBITDA soared by 268.8% over the same period last year. Kogan also made the largest ever monthly expenditure on marketing to enhance the customer base and the brand. 

Now, the online retailer is bracing for the Christmas season, which is usually the busiest trading period for the Company. 

On 20 November 2020 (AEDT 12:21 PM), KGN traded at $ 18.100, down by 1.255% from the previous close. 

 

 


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