Profits slump for online retailer Kogan
Trans-Tasman online retailer Kogan has reported a return to adjusted profit during the first quarter, but not by enough to prevent a 69 per cent slump for the full year to June 30.
Sales for the year were static, up by just 0.1 per cent, to $1.18 billion, while adjusted EBITA was $19.1 million – down from $61.8 million last year and $49.7 million the year before.
Significantly, the majority of its EBITA for the latest year came from New Zealand, where it earned $12.2 million from its Mighty Ape marketplace. The core Kogan.com operation earned $6.9 million, down 87.4 per cent year on year.
However, despite what the company described as tough trading conditions – impacted on both sides of the Tasman by Covid – Kogan’s active customer base has grown to 3,972,000 and its Kogan First loyalty program membership surged by 210 per cent.
Ruslan Kogan, founder and CEO of Kogan, said consumers don’t want to alter their lifestyle but are happy to shift the way they shop in uncertain times.
He said the company is working to become “leaner” and to pass on cost efficiencies to customers through lower prices in response to changes in the macro environment.
Earlier this year, the business said consumer demand did not meet its expectations as it moved through a challenging market condition in its third-quarter results.
Meanwhile, the group’s total stock inventory has been reduced from $227.9 million a year ago to $161.1 million, with $139.2 million worth in warehouses and $21.9 million worth in transit. That has also assisted in boosting its net cash position from $12.8 million at the end of last financial year to $32.1 million.
Kogan’s portfolio of businesses includes Kogan Retail, Kogan Marketplace, Kogan Mobile, Kogan Internet, Kogan Insurance, Kogan Travel, Kogan Money, Kogan Cars, Dick Smith, Matt Blatt and Mighty Ape.