Kogan.com lifts profit, dividend as online surges in pandemic

Kogan.com has lifted full-year net profit 56pc and almost doubled its dividend amid a boom in online sales fuelled by shutdowns.

Ruslan Kogan. Picture: Hollie Adams

Online marketplace Kogan.com has posted a 55.9 per cent gain in full-year net profit to $26.8 million amid a boom in online sales fuelled by COVID-19 shutdowns.

Revealing a rise in full-year revenue of 13.5 per cent to $497.9m, Kogan.com joined new industrial players able to reward its shareholders by almost doubling its final dividend for fiscal 2020.

While many other companies, like banks, are pulling back on payouts, the online retailer declared a final dividend of 13.5c per share, almost double the 8.2c per share paid out in the final dividend for 2019.

The retailer said increased revenue was driven by growth in its exclusive brands products.

Kogan.com booked profit before tax of $38.85m, up 66 per cent, including unrealised foreign exchange losses of $1.4m in 2020.

The retailer also booked a of $700,000 provision for estimated penalties and costs associated with the costs of a court case launched by the Australian Competition and Consumer Commission, after which a court in July ruled that one of its promotions was false or misleading.

Kogan.com said it ended the period with inventories of $112.9m, which comprised $32.5m of inventory in transit and $80.4m of inventory in warehouse. This reflects the company’s investment over the course of the half in inventory in order to meet growing customer demand — particularly of exclusive brands.

More than 99 per cent of inventory in warehouse at 30 June 2020 was less than 365 days old, the retailer said.

Founder and chief executive Ruslan Kogan said the second half of 2020 was an extremely turbulent and challenging period for the world, the country, and the company.

“There is a retail revolution taking place as more and more shoppers learn about the benefits of eCommerce. 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.”

Mr Kogan said Kogan Marketplace was a standout performer during the year, exceeding expectations.

“Importantly, the emergence of Kogan Marketplace has made Kogan.com even more scalable by enabling us to grow infinitely without a corresponding investment in inventory.”

The business achieved growth in active customers of 35.7 per cent in fiscal 2020. At June 30,

2020 the business had 2.183m active customers.

Kogan.com has not provided earnings guidance for 2021.

It said in July unaudited management accounts showed gross sales grew more than 110 per cent, year on year gross profit grew more than 160 per cent and year on year adjusted EBITDA was more than $10m.