Online retailer Kogan (ASX: KGN) recorded a 52.7 per cent spike in gross sales to surpass $1 billion for the first time in FY21, but profitability has suffered due to one-off costs relating to inventory, logistics and the 2020 acquisition of NZ-based online retailer Mighty Ape.
This meant that while underlying profits were up 43.2 per cent at $42.9 million, the statutory net profit after tax (NPAT) was down 86.8 per cent at $3.5 million.
The result spooked investors this morning, sending KGN shares down by 13.33 per cent to $1.75 each.
Excess inventory was the main driver of the one-off charge, pushing up variable costs by $44.9 million, as well as marketing costs for promotions aimed at offloading the surplus stock.
Logistics charges of $7.7 million were incurred as a result of COVID related warehousing and supply chain interruptions from late 2020 to April 2021, while $12 million has been put aside for payments of 'people costs' relating to tranches associated with the Mighty Ape acquisition.
Kogan reports the newly acquired Mighty Ape team and operations are progressively being integrated into the group, with the new business generating gross profit of $19.9 million and achieving its forecast EBITDA of $14.3 million.
"Over the past 12 months, Kogan.com turned 15 years young, surpassed $1 billion in gross sales for the first time ever, surged past three million active customers, had record-breaking Black Friday sales, and made our largest ever acquisition to accelerate our expansion into New Zealand," CEO Ruslan Kogan said.
"It's been a challenging year for so many people around the country. I’m proud that our team remained focused through difficult COVID-impacted operating conditions and found ways to support our customers when they needed our help most.
"Over the past 18 months we have witnessed a massive swing towards the eCommerce retail revolution, one Kogan.com has been ready and waiting for, for well over a decade. We look forward to continuing our quest to delight our customers by making the most in demand products and services more affordable and accessible."
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