Tuesday, 30 October 2018 06:10

Kogan shares fall by a third after first-quarter results announced

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Kogan shares fall by a third after first-quarter results announced Pixabay

Online retailer Kogan has seen its shares fall by about a third on Monday, with a drop to $3.11, losing $1.53.

The company's first-quarter results were announced yesterday, showing a jump in active customer numbers but a decline in gross margins. The company said one reason for this was that sites which avoided charging GST were costing it sales

After the Australian Government made it compulsory for all online purchases to be charged GST, Kogan saw a rise in sales as many of its competitors shut down, The Australian reported.

But the company now says that foreign online retailers are avoiding GST and this is eating into its sales.

It said on Monday that there was no way to find out if the avoidance of GST would be a permanent or temporary occurrence.

Revenue in the exclusive brands line went up by 15.7% while revenue from partner brands rose 73%.

“While growth in the global brands division presents a challenge to the business in the short term, we have built a resilient portfolio of businesses, with the core divisions of exclusive brands, partner brands and Kogan Mobile continuing to show healthy growth,” Kogan founder and chief executive Ruslan Kogan said.

“We continue to execute our long-term strategy to grow our ecommerce footprint and make the most in-demand products and services more affordable for all Australians.

“We are better prepared for this busy Christmas sales period than we’ve ever been with warehouses in Victoria, New South Wales, Queensland and Western Australia fully stocked with the most in-demand products.”

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Sam Varghese

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Sam Varghese has been writing for iTWire since 2006, a year after the site came into existence. For nearly a decade thereafter, he wrote mostly about free and open source software, based on his own use of this genre of software. Since May 2016, he has been writing across many areas of technology. He has been a journalist for nearly 40 years in India (Indian Express and Deccan Herald), the UAE (Khaleej Times) and Australia (Daily Commercial News (now defunct) and The Age). His personal blog is titled Irregular Expression.

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