Profit soars as Kogan rides e-commerce bonanza

Profit soars as Kogan rides e-commerce bonanza

Online retailer Kogan.com (ASX: KGN) has emerged as a success story of the COVID-19 pandemic period, notching a $27 million profit today.

Much of the company's success can be attributed to the growth of its Amazon-style storefront Kogan Marketplace, with gross sales increasing by 71.2 per cent in the second half. 

However, it was an influx of new customers during the nationwide COVID-19 restrictions that really bolstered Kogan.com's market position, with a 35.7 per cent increase in active customers.

"There is a retail revolution taking place as more and more shoppers learn about the benefits of ecommerce," said founder and CEO Ruslan Kogan during an investor presentation this morning.

"We're seeing record numbers of first time customers, who then go on to make repeat purchases at a 40 per cent faster pace than previously.

"For us this is a very exciting trend that shows that once customers learn about shopping online they change their ongoing behaviour."

Kogan.com's year was underscored by a number of highlights, one being the acquisition of furniture retailer Matt Blatt.

Once a showroom-based business, Matt Blatt is now completely online, and Ruslan Kogan says this move has taken the brand to new heights.

"The new Matt Blatt was operating within 24 hours of signing the deal, and there are now more products available to Matt Blatt customers than ever before in its near 40-year history," said Ruslan Kogan.

In addition to NPAT growth of 56 per cent, Kogan.com recorded gross sales of $768.9 million and revenue of $497.9 million.

"Our businesses thrive through adversity, as years of preparation met opportunity this financial year, resulting in our largest ever growth in gross sales, gross profit and adjusted EBITDA," said Ruslan Kogan.

"We achieved this all while heavily investing in our platform and growing active customers, which is expected to have ongoing long-term benefits because these new active customers will continue purchasing."

Kogan.com's exclusive brands achieved year on year revenue growth of 26.4 per cent and gross profit growth of 43.7 per cent, resulting in a contribution of 51.3 per cent to overall gross profit in FY20.

On the back of these stellar results the Kogan.com board has declared a fully franked final dividend of 13.5 cents per share.

"We're continually evolving as a business to respond to the demands of our customers, and to strengthen our competitive advantage," Ruslan Kogan said.

"A growing portfolio of businesses provides diversification of income, making us a more resilient business.

"At this stage, our platform represents only around 3 per cent of Australian online retail trade. We're just getting started."

Shares in Kogan.com are down 5.52 per cent to $20.64 per share at 11:03am AEST.

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