Kogan doubles profit as customer base shoots past three million

Kogan doubles profit as customer base shoots past three million

An insatiable appetite by consumers for online retailing, including a record-breaking Black Friday campaign, has helped Kogan.com (ASX: KGN) more than double interim earnings in FY21.

The company has posted a net profit of $23.59 million, up 164 per cent from $8.92 million a year earlier.

Despite the record result, the market drove Kogan's shares down by almost 10 per cent this morning, pushing them further below their 12-month high of $25.57 reached in October.

In a period of major milestones, Kogan says it has three million active customers, which founder Ruslan Kogan (pictured) says is now 1,000 times more than the number of customers he expected to attract when he established the business 15 years ago.

The latest half also saw the company smash records around the Black Friday sales event, with Kogan enjoying seven of its 10 biggest trading days ever during the period.

Kogan posted gross sales of $638.2 million in the six months to the end of December, up 97.4 per cent on the previous corresponding period. Group revenue of $414 million was up 88.6 per cent.

The latest result was buoyed by the contributions of Mighty Ape, the New Zealand online retailer acquired for $122.46 million in December, and the newly launched Kogan Energy business launched in September.

Kogan says Mighty Ape grew its active customer numbers to 719,000 from about 690,000 prior to Kogan's acquisition. This is in addition to the 3,003 million active customers now on Kogan.com's books.

"We launched Kogan.com to change the retail industry nearly 15 years ago, and we would've been cheering if we helped 3,000 customers that year," says Ruslan Kogan.

"So even though well over three million customers used Kogan.com in the last 12 months, we feel like we're just getting started."

Kogan says he plans significant improvements to the company's logistics network to enhance the speed and range of delivery.

"The rapidly expanding network effect at Kogan.com means that as we attract more customers, we're able to make the products and services they need even more affordable and accessible," he says.

"I love hearing feedback from customers that have shopped with us many times over our 15-year journey about how the experience keeps getting better and better - this is what makes our team jump out of bed in the morning.

"The investments we're making into Kogan.com today are to ensure that we can continue to delight millions of customers in more and more ways."

Kogan says it is progressively integrating the Mighty Ape team with its operations. The NZ arm delivered strong sales over the peak Christmas period with revenue of $20 million and gross profit of $5.4 million.

Kogan revealed in December that Mighty Ape posted $120.1 million in revenue in the 12 months to the end of September last year. At the time, Kogan said Mighty Ape was forecast to provide year-on-year revenue and EDITDA growth of 43.7 per cent and 254.1 per cent respectively in FY21.

However, Kogan is not providing any guidance for its group profits in FY21, consistent with its practice of the past two years.

It will provide regular business updates, with the latest figures from January showing gross sales up 45 per cent and gross profit up more than 102 per cent.

Kogan is paying an interim dividend of 16c per share, up from 7.5c a year ago.

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