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E-commerce beats expectations on full-year profit

Online retailer has beaten its prospectus forecast with a pro-forma full-year profit of $809,149. The company which relaunched Dick Smith as an online-only electronics retailer in May and floated on the Australian Securities Exchange two months later said revenue for the 12 months to June 30 rose five per cent from FY15 to $211.2 million. Stripping out the costs of the IPO and other one-off adjustments, reported pro-forma underlying earnings of $4.0 million, 37.9 per cent higher than forecast in its prospectus. founder and CEO Ruslan Kogan said the results reflect strong growth in active customers and subscribers, successful integration of Dick Smith, strong sales in third party products, new verticals Kogan Mobile and Kogan Travel, and improved back end efficiency. had 3.7 million active subscribers at 30 June 2016, up 60.8 per cent from 2015. Active customer numbers were up 13 per cent in total, and 8.2 per cent excluding Dick Smith. said Dick Smith’s performance was higher than expected, delivering $6.5 million in revenue since its launch in May. The company said its integration of the electronics retailer provides a new channel to market while leveraging its existing operating platforms and cost base. plans to invest funds raised from its recent IPO to drive growth in FY17. Target areas for investment include new products and categories as well as marketing initiatives. “Following the IPO, is now well positioned to capitalise on growth opportunities in private label, with new and expanded product lines under production in advance of the peak Christmas trading period,” Kogan said.

The company also aims to take advantage of the under-penetration of Australia’s online retail market. According to Euromonitor, the Australian online retail market was valued at $17 billion in 2015, and is forecast to grow at 11.5 per cent CAGR to 2019. Changing consumer preferences, technological innovation, improved user experience and increasing internet usage are all driving this growth.

“Today, almost one in every six Australians subscribes to our sites. We will continue to see that influence grow as the Australian online consumer becomes more discerning on convenience and online experience,” Kogan said.

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