- Kogan shares ended 12.27% down at AU$6.15 on Thursday after hitting a fresh 52-week low of AU$5.77.
- The stock has been falling over the last one year and is down 69% in this period.
- Kogan highlighted that COVID-19 related interruptions impacted operational costs throughout the first half.
ASX-listed online retailer Kogan.com Limited's (ASX:KGN) shares ended 12.27% down at AU$6.15 on Thursday after hitting a fresh 52-week low of AU$5.77. The stock has been falling over the last one year and is down 69% in this period. However, today's fall in Kogan shares price coincides with the company's announcement of business update for the first half of the financial year 2022.
KGN’s 1HFY22 gross sales up, but profit drops over 4%
(Note: 1HFY22 financial results are unaudited and include results of Mighty Ape. The results are compared to audited 1HFY21 results. Results of Mighty Ape included for the month of December 2020)
The Australian company that operates a portfolio of retail and service businesses, reported a growth of 9% year-on-year (y-o-y) in its gross sales at AU$698 million for the first half of FY22. The company attributed the sales growth to expansion of Kogan Marketplace, loyalty program Kogan First, as well as Kogan Energy and Kogan Mobile New Zealand.
Despite a 4% drop in gross profit at AU$112.4 million, KGN's marketplace continues to grow rapidly, achieving more than AU$200 million in gross sales for the first time ever in the first half, up 28.7% y-o-y.
Source: © Nionx | Megapixl.com
The company stated that continued supply chain interruptions because of the current COVID-19 crisis and corresponding demand swings hurt gross profit.
KGN’s adjusted EBITDA was AU$21.7 million for the 1HFY22 period. After funding the second tranche payment of AU$29.9 million (for Mighty Ape acquisition) during the first-half, the company maintained a good capital position as of 31 December 2021, with net cash (total cash less drawn debt) of AU$39.7 million.
Mighty Ape is a leading online retailer in New Zealand, with stores in both New Zealand and Australia. In Dec 2020, KGN struck a deal to buy the company.
Mighty Ape and other operational updates
The company further updated that its active customers increased to over 4,000,000, with Kogan.com active customers rising by more than 10% y-o-y to 3,314,000. Mighty Ape had 757,000 active customers as of December 31, 2021. While its First members increased by 176% y-o-y to 274,000 as of December 31, 2021, and by 38.5% since September 30, 2021.
For the first time, Kogan Marketplace exceeded $200 million in gross sales in the first half, an increase of 28.7% y-o-y.
Kogan highlighted that COVID-19 related interruptions impacted operational costs throughout the first half, resulting in higher logistic expenditures. In addition, the company continued to invest heavily in marketing to expand the platform, increase active customer growth, and scale the Kogan First loyalty programme.
Commenting on the performance, founder and CEO of Kogan.com, Ruslan Kogan, said:
In its latest AGM report, KGN had said that it would introduce NSW Gas under its Kogan Energy plans. As per the AGM report, Kogan Mobile Australia planned to launch 5G, new additional low priced monthly plans and eSIM.
Kogan.com Ltd's businesses include Kogan Retail, Kogan Mobile, Kogan Marketplace, Kogan Internet, Kogan Travel, Kogan Money, Kogan Insurance, Kogan Cars, Kogan Energy, Dick Smith, and Matt Blatt.
The company also has exclusive brands like Kogan, Ovela, Fortis, Vostok, and Komodo. In addition to product offerings, the company derives commission-based revenue from the new verticals, including Kogan Mobile, Kogan Internet, Kogan Insurance, Kogan Money, Kogan Cars, Kogan Energy, and Kogan Travel well as seller-fee based revenue from Kogan Marketplace.
Despite having a vibrant business portfolio and promising plans for the future, Kogan.com shares have been correcting over the last one year. This could be because of its valuation, which seems to be very high. At Thursday’s closing price, Kogan shares are valued at a PE (price/earnings) of 204.3x (trailing 12 months).