Kogan sees record half-yearly sales and profit, though revenue dips
Kogan has broken through the slump that affected many retailers over the Christmas period, delivering record gross sales and profit for its first half of FY2020, as well as a 20.8 per cent growth on net profit.
Gross sales grew to $322.9 million for the half, 16.4 per cent up on the prior corresponding period’s $277.3 million. Gross profit also saw strong growth of 10.6 per cent to $49.9 million, up on the $45.1 million achieved the prior year.
Additionally, the business’ net profit rose 20.8 per cent to $8.9 million, from $7.4 million during the first half of FY19.
However, revenue from third-party brands fell by 25.3 per cent compared to the prior year, while revenue from exclusive brands rose 17 per cent. Along with declines across Kogan Travel and Kogan Insurance, the business saw total revenue fall 5.3 per cent to $219.5 million.
“This half has been a period that saw us taking significant steps to invest in the future success of our platform and make it easier than ever for customers to shop with us,” Kogan founder and chief executive Ruslan Kogan said.
“In particular, the continued growth of Kogan marketplace has led to a transition period for the company.
“As we further enhance the Kogan Marketplace platform it will enable us to achieve ongoing growth without relying on inventory and associated capital requirements and constraints. “
The marketplace offer saw gross sales improve 44.6 per cent in the December quarter compared to the September quarter, and Kogan said the vertical has a backlog of sellers ready to be onboarded to the platform.
During the half the Kogan brand launched four new verticals in Kogan Super, Kogan Mobile NZ, Kogan Credit Cards and Kogan Energy, and improved loyalty program Kogan First memberships “significantly” – though the business didn’t specify the exact growth it achieved.
In regard to the upcoming half, Kogan didn’t give a firm outlook but said January gross sales had grown 17 per cent on the prior year.
Additionally, having now diversified itself across 14 different verticals, Kogan is looking to reach a 1 per cent market share in each of these industries – having already reached this in Kogan Retail and Kogan Mobile Australia.
And while the business didn’t report any impact from the ongoing threat of coronavirus, it did cede that should any of its international suppliers or manufacturers suffer sustained closures or delays 2H20 earnings may be impacted.
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