Kogan updates earnings at AGM
Speaking to shareholders at the annual general meeting today, Ruslan Kogan, CEO and founder of Kogan.com, reported strong trading in October, continuing the trend of year-on-year growth in the first quarter of FY18.
“Today, I am pleased to advise that the year-to-date growth numbers up to the end of October have improved further, with revenue growth of 36.2 per cent, gross margin of 18.4 per cent and EBITDA growth against prior year’s pro-forma EBITDA of 58.3 per cent,” Kogan said.
“This represents an increase in the year-to-date growth trend, following a strong trading performance in October…We are very excited about the trajectory of the business and the growth opportunities available to us.”
Kogan said the company has elected not to provide full-year earnings guidance, but will issue regular trading performance updates at the time of quarterly cash-flow statements.
The online retailer in August reported its first full-year results since listing on the ASX. Delivering $289.5 million in revenue, $13.2 million in pro-forma EBITDA and $7.2 million in NPAT, Kogan.com outperformed its prospectus forecasts on all key metrics and showed significant growth on the previous year’s earnings.
Kogan at the AGM today again pointed to the company’s portfolio strategy as a key driver of growth. Since starting as a private label TV retailer with two products in the range, Kogan.com has evolved to offer a portfolio of products and services businesses, including mobile, NBN and insurance, as well as retail and travel.
Kogan said the company’s diverse offering plays a key role in attracting a wide range of customers, who then become loyal across verticals, as well as partners and third-party brands, who help expand the offering, creating a virtuous cycle.
“As the quality and size of our partnerships improve, we then are able to further drive improved customer offers, further propelling this virtuous cycle,” he said.
Kogan noted that he believes online retail is still under-represented in Australia compared to other major developed economies.
“Today online retail represents around 7.5 per cent of the total Aussie retail market. For economies with a large marketplace player (such as an Amazon or an Alibaba) online retail penetration is closer to 20 per cent,” he said.
Amazon will undoubtedly bring more shoppers online, he said, and also presents an opportunity for Kogan.com to drive incremental sales as it already does through Ebay and TradeMe.
“With a brand that has built a reputation for price leadership through digital efficiency, Kogan.com is well placed to continue to grow market share.”