Kogan tops float forecasts after Dick Smith takeover

Retailer Kogan.com says it’s topped its float predictions after taking over Dick Smith’s online business.

Ruslan Kogan celebrates the listing of his online retailer.

Online retailer Kogan.com has topped forecasts provided in the prospectus for its recent float, while reaffirming its expectations for growth in the coming year.

The Ruslan Kogan-led group recorded pre-tax earnings of $4 million, more than double the result from fiscal 2015 and 37.9 per cent above guidance provided in its prospectus.

The retailer (KGN) outdid forecasts for after-tax earnings, swinging to a profit of $800,000, double its guidance.

The group also edged revenue projections, with sales rising 5.2 per cent to $211.2m.

The revenue result outstripped expectations by around 5 per cent, due in part to the integration of the online business of Dick Smith Electronics, which delivered revenue of $6.5m in its two months of operation for Kogan.com.

Dick Smith numbers were not included in the prospectus that accompanied its $50m IPO in July.

The group initially felt the brunt of heavy selling on the ASX upon debut on July 7 but has steadily worked its way back toward its IPO price over the past three weeks. Ahead of the result, however, it remained down 7 per cent on its listing price of $1.80.

“We are pleased to deliver results for our shareholders that exceed prospectus forecasts and demonstrate that we are on track to continue to build the Kogan.com business in line with our long term business strategy,” founder and chief executive Mr Kogan said.

“Our launch of Dick Smith ahead of schedule demonstrates the capability of our team to rapidly deliver major complex projects, as does our successful launch of Kogan Mobile and Kogan Travel in 2015.

“Following the IPO, we have released the capital constraints on the business, allowing us to aggressively pursue our growth ambitions.”

The group said it would focus on expansion in higher margin private label goods, boosting its investment and range in the lead up to Christmas.

Kogan.com reiterated expectations for the coming fiscal year for pre-tax earnings to rise to $6.9m, after-tax profit to hit $2.5m and revenues to rise to $241m, although the view appears cautious given a positive start to the financial year.

“Following stronger than expected results in FY16 and trading results for July that are ahead of the FY17 prospectus forecast monthly projection, the directors reaffirm FY17 prospectus forecast,” the company said.