Kogan defies retail downturn with five-fold profit rise
Written on the 22 February 2018 by David Simmons
Kogan.com (ASX: KGN) has confirmed the rise of online shopping and shown Australian retailers it's not all doom and gloom after it posted an $8.3 million half year profit.
The e-tailer's profit rose more than five-fold at a time when Australian retailers, especially bricks and mortar operators, are struggling to survive.
Profit for the six months to December 31 rose from $1.5 million in the prior corresponding period as revenue soared 45.7 per cent to $209.6 million, primarily driven by customer growth and investments made in inventory marketing.
During the first half, the company made significant moves into the insurance space, introducing a number of packages around home, contents, landlord, car, and travel insurance.
The company declared an unchanged fully franked interim dividend of 3.9 cents and said revenue growth had further accelerated at the start of the second half.
Revenue was also up on the 1H17 by 45.7 per cent to $209.6 million.
"We are always mindful of the fact that our customers have a lot of choice and we're humbled by the fact that more and more Aussies are voting for us with their wallets.
"The business is in the best shape it's ever been and our team is excited about our pipeline of initiatives that will further enhance our consumer offering."
The group's experiments in the mobile space paid off, with Kogan Mobile achieving revenue growth of 340.9 per cent with commissions of $4.8 million in the first half. The group's success in the space was assisted by a commercial arrangement with Vodafone.
Also in partnership with Vodafone, the group is set to launch Kogan Internet in the second half of FY18, offering competitively priced fixed-line NBN services.
Shares in Kogan are up 10.65 per cent to $8 at 11.30am AEDT.
Business News Australia
Author: David Simmons