Kogan.com lifts profit, passes 3m customers

The online shopping boom in the pandemic has helped Kogan.com boost its dividend after an almost threefold increase in profit.

Ruslan Kogan. Picture: Hollie Adams

The online shopping boom triggered by the COVID-19 pandemic and lockdowns has delivered an almost threefold increase in online retailer Kogan.com’s profitability, rewarding shareholders with a healthy boost to their interim dividend.

But a pullback in sales in January caught the market by surprise, to send shares down 10 per cent.

The corporate indigestion and growing pains caused by Kogan.com’s rapid growth in 2020 — partly fuelled by the online boom — did cause supply and warehousing issues for the company, but founder and chief executive Ruslan Kogan remains confident the online retailer can handle the growth trajectory now being generated.

Mr Kogan told The Weekend Australian Kogan.com was now sitting at record high inventory levels for the business, which he said testified to the company’s confidence in the strong trading conditions and sustained uptick in demand he was expecting for 2021.

Kogan.com on Friday released its half-year result, which showed net profit rocketing to $23.6m against $8.9m in the previous corresponding period, a gain of 164.2 per cent. The growth came as gross sales for the half almost doubled to $638.2m.

However, in a trading update it revealed that sales into January had slowed to growth of 45 per cent year-on-year, still strong but down from almost 100 per cent between July and August, which the market reacted negatively to.

Shares in Kogan.com dropped more than 13 per cent on release of the December half result and trading update before closing down $1.62, or 10.38 per cent, at $13.98. Its shares are down 26 per cent since the start of the year.

Kogan.com, along with a vanguard of online retailers, has booked record sales and profits through the COVID-19 pandemic as the trend to shop online accelerated in Australian with people in lockdown at their homes and unwilling or unable to go to shopping centres.

The boom in online shopping, also helped by the sales promotions in November led by Black Friday and Cyber Monday, has shown through in Kogan.com’s first-half results. The online retailer said that after a record breaking Black Friday trading period, with seven of the 10 biggest trading days ever occurring within the period surrounding Black Friday, the company reported gross sales up 97.4 per cent on the prior year and revenue of $414.0m, up 88.6 per cent on prior year. It also surpassed 3 million active customers.

Mr Kogan said the online retailer would continue to enjoy strong conditions even as COVID-19 fades and people return to more normal patterns of shopping activity.

“The forecasts are that Australian e-commerce is going to keep on booming and will catch up to the rest of the world, and we think we are a top-tier operator in Australia with a really strong offer for customers, so we expect to continually grow our market share — which is what we are building the business for.

“We are continually opening new warehouses, we are continually investing in inventory.”

Kogan.com declared an interim dividend of 16c per share, up 113.3 per cent on last year, payable on May 31.

Kogan.com has also named new directors, appointing Janine Allis and James Spenceley as new directors to the company. Ms Allis is the founder of Boost Juice, while Mr Spenceley founded Vocus Communications and is chairman of local services provider Airtasker.