After what Kogan (ASX:KGN) described as a “promising first full half contribution from the Kogan Marketplace”, the company reported gross sales of $322.9 million - up 16.4% on prior year (1HFY19: $277.3 million) - and revenue of $219.5 million, down 5.3% on the prior year’s $231.8 million, “due largely to the growth of Kogan Marketplace in respect of which only the seller fees are recognised as revenue”.
As at 31 December 2019, Kogan had cash of $34.1 million, an undrawn bank debt facility of $30.0 million and inventories of $94.7 million, which comprised $13.1 million of inventory in transit and $81.6 million of inventory in warehouse - reflecting what Kogan says was the company’s investment over the course of the half in inventory in order to meet customer demand — particularly of Exclusive Brands.
“When compared to the prior year, inventory levels increased only 1.9% (1HFY19: $92.9 million), notwithstanding the growth in Gross Sales of 16.4% — this reflects the transition to becoming a more inventory-light platform as the Kogan Marketplace scales. More than 98% of inventory in warehouse at 31 December 2019 was less than 365 days old,” Kogan said.
"We are proud to have delivered a record half in gross sales and gross profit whilst delighting our customers with the broadest offering we’ve ever had and the widest and fastest distribution network we’ve ever had,” said Ruslan Kogan, Founder & CEO.
“This half has been a period that saw us taking significant steps to invest in the future success of our platform and make it easier than ever for customers to shop with us. You can now use our platform to get an incredible deal on ab wheels or zip lock re-useable sandwich bags and everything in between,” Kogan said.
“During the period we delivered several game changing projects including the launch of four new business units whilst also growing Kogan Marketplace and expanding our Kogan First subscriber base.
“While Kogan First is still relatively new, we’ve already funded over $1m of benefits to Kogan First subscribers - these benefits include free shipping, free upgrades to express shipping and exclusive discounts. All of these business units provide new avenues to delight our customers and further expand our loyal Kogan Community.
“In particular, the continued investment in the Kogan Marketplace platform has led to a transition period for the company. As we progress our investment in the Kogan Marketplace platform, it will enable our business to achieve ongoing growth without the ongoing investment in inventory."
Kogan's half year results in brief:
- Gross Sales of $322.9 million, up 16.4% on prior year (1HFY19: $277.3 million)
- Revenue of $219.5 million, down 5.3% on prior year (1HFY19: $231.8 million) following launch of Kogan Marketplace, where only the seller fees are recognised as revenue
- Gross Profit of $49.9 million, up 10.6% on prior year (1HFY19: $45.1 million)
- Adjusted EBITDA of $18.2 million, up 35.2% on prior year (1HFY192: $13.4 million)
- NPAT of $8.9 million, up 20.8% on prior year (1HFY19: $7.4 million)
- Growth in Active Customer base to 1,699,000, up 10.2% from 31 December 2018
- Fully franked Interim Dividend of 7.5 cents per Share, up 22.9% on prior year (1HFY19: 6.1 cents per Share)