Kogan catches growth after Dick Smith relaunch
- 18 August, 2017 10:20
Kogan founder and CEO, Ruslan Kogan.
Kogan has revealed the results of its 2017 financial results for the period ending 30 June, bringing in a statutory net profit after tax (NPAT) of $3.7 million, up $2.9 million from the $0.8 million it recorded the same time last year.
The company said in a statement on the Australian Securities Exchange (ASX), that this includes $3 million in one-off costs associated with the group’s Initial Public Offering (IPO) and unrealised foreign exchange losses of $0.7 million.
In its first year as a publicly listed company, Kogan's revenue from ordinary activities was recorded at $289.5 million, an increase of $78.4 million (37.1 per cent) from its 2016 financial year results.
According to Kogan, the increase in revenue was driven predominantly by growth from the relaunch of Dick Smith as an online retail entity, as well as growth in active customers and Kogan Mobile.
It said additional brands and an expanded range of products boosted growth in third party domestic sales, reflecting increased interest from brands and distributors in the Kogan.com active customer base.
For the 2017 financial year, Kogan saw growth in its active customer base, to 955,000, up 36 per cent from 30 June 2016, driven by growth in the Kogan portfolio and “strategic marketing initiatives”.
In addition, it said Kogan Mobile is “continuing to scale” with annual revenue reaching $3.6 million in that financial year as a result of new customer acquisitions and repeat customers.
The company’s pro forma NPAT of $7.2 million “significantly outperformed” its prospectus forecast of $2.5 million. Its pro forma Net Profit After Tax and Amortisation (NPATA) was $8.6 million, reflecting the pro forma NPAT plus the non-cash armortisation of the Dick Smith assets.
Its pro forma Earnings before interest, tax, depreciation and amortisation (EBITDA) was recorded at $13.2 million, up 230 per cent on the $4 million from the prior and up 91.3 per cent on prospectus forecasts.
According to Kogan, its gross margin of 17.9 per cent was up from 15.5 per cent due to product sales mix and entering new verticals.
“Margin expansion was driven by precision demand planning to build private label inventory, automation initiatives, and the accelerated growth of Kogan Mobile,” it said.
In the 2017 financial year, Kogan deployed proceeds from the Initial Public Offering (IPO) to respond to pent up demand for its private label products. This resulted in its private label revenue increase of 20.8 per cent from the prior year and represented 52.2 per cent of the group’s gross profit in FY17.
Kogan founder and CEO, Ruslan Kogan, said the company has delivered a strong result for the full year, reflecting the growth in the company’s portfolio of products and services and “well-considered” investments.
“[It] will allow us to continue to fund growth in our core Kogan Retail business, while the continued diversification of our Kogan portfolio is providing strong cash flows,” he mentioned.
“We will continue to look for opportunities to serve our community and customers with new value-focused offers. We are all very excited for the year ahead.”
Moving forward, for the 2018 financial year, the company out lined that it will focus on the following growth initiatives:
- Continued investment in expanding the Kogan Retail Private Label range
- Continued investment in brand building to drive revenue per customer and conversion rates across the portfolio
- Continued partnerships with select brands and distributors via Kogan Marketplace, giving those brands an “effective channel to market”
- Continued promotion and marketing support for Kogan Mobile
- Ramp up of Kogan Insurance
- Launch of Kogan Broadband in the second half of 2018, in partnership with Vodafone
- Continued assessment of opportunities to grow Kogan Retail
- Continued assessment of opportunities to expand the Kogan Portfolio of products and services.
At the time of writing, Kogan’s shares were trading a $2.40.