It took 15 years, and a devastating global pandemic, but Kogan.com is finally seeing mass uptake of online shopping in Australia, according to Ruslan Kogan, founder and CEO of the thriving e-commerce company.

Kogan.com has reported record increases in gross sales, profit and adjusted EBITDA in FY20, driven by a record increase in first-time customers, who made repeat purchases at a 40 per cent faster pace than ever before.

“For us, this is a very exciting consumer behaviour trend that shows that once customers learn about online shopping, they change their ongoing behaviour,” Kogan said in a presentation to investors on Monday morning.

“Once someone discovers the benefits of online shopping, I struggle to see why they would ever go back to the old way of doing things.”

Kogan described the company’s strong performance in FY20 as years of preparation meeting opportunity, and said it is only the beginning of the retail revolution. 

Kogan.com is set to benefit long-term from the acquisition of new customers that accelerated at the end of FY20 and the continued growth of Kogan Marketplace, which is now a material contributor to gross profit. 

“Moving into FY21, we will further scale the Kogan Marketplace platform, enhancing the rapid onboarding of new sellers, which will improve both the customer and seller experience,” Kogan said.

Also driving future growth is the company’s plan to improve the Kogan First loyalty program, as well as its data-driven investment in exclusive brands and expansion into new verticals via industry partnerships, both of which contributed to its strong performance in FY20.

In addition to the new verticals Kogan.com launched in FY20 – cars, credit cards, superannuation and energy, as well as mobile phone plans in New Zealand – the company also acquired the intellectual property and goodwill of the popular furniture brand Matt Blatt for $4.4 million.

The online retailer is now operating Matt Blatt as an online-only business. The site launched within 24 hours of the deal being finalised, and it reportedly offers more products than under its previous owners. 

FY20 highlights

Kogan.com reported $768.9 million in gross sales, a nearly 40 per cent increase year on year. This figure is made up of the gross transaction value of the company’s retail, marketplace and verticals operations. 

Revenue, which includes retail revenue, marketplace seller fees and commission fees from the verticals business, was $497.9 million, a year-on-year increase of 13.5 per cent. 

The company had gross profit of $126.5 million, up 39.6 per cent year on year. Its adjusted EBITDA, which does not include costs associated with foreign currency fluctuations or the ACCC’s finding that it made misleading representations about a tax-time promotion, was $49.7 million, up 57.6 per cent year on year. 

Gross sales, gross profit and adjusted EBITDA all increased faster in the second than in the year as a whole. 

Net profit after tax increased 55.9 per cent year on year to $26.8 million. 

The number of active customers grew by more than 500,000 to nearly 2.2 million as at June 30, 2020. While the growth of new and active customers was largely driven by an increase in marketing spend – Kogan.com spent more on marketing in FY20 than any other year – CFO David Shafer said this was strategic. And the proportion of traffic from paid sources still accounted for less than 30 per cent of overall traffic on the site.

The company ended the year with $146.7 million in cash. This includes the proceeds of the $100 million placement conducted earlier in the year, but not the proceeds of the $20 million share purchase plan which were received in July. The company has an undrawn bank facility of $30 million. 

Kogan.com declared a fully franked final dividend of 13.5 cents per share for the second half of FY20, up 64.6 per cent year on year. 

The company did not provide any earnings guidance for FY21, but its unaudited accounts for July show that gross sales were up 110 per cent year on year, and gross profit was up more than 160 per cent year on year. Adjusted EBITDA for the month was reportedly more than $10 million.