Kogan reports strong growth in final quarter of FY19
Kogan.com has reported strong growth in the final quarter of FY19, thanks to the launch of its online marketplace in Q3.
The online retailer’s unaudited full-year results, which the company announced in a statement to the ASX on Tuesday, contradict the common narrative that Australia is experiencing a “tough retail environment”.
“In contrast to what has been reported as a tough retail environment, we have been able to grow the business and earnings while investing in the Kogan.com customer experience and enabling our long-term strategy,” Kogan.com founder and CEO Ruslan Kogan said in a statement.
“Our team has continued to delight our customers while delivering a solid quarter of trading.”
The company did not disclose exact figures from Q4 FY19 – it will provide more detailed commentary on its trading performance when it releases its full-year results next month – but said second-half EBITDA growth was more than 25 per cent year on year.
It boosted gross profit more than 12 per cent year on year in the second half, while cutting operating costs including marketing, wages, variable and other costs, by more than 2 per cent.
“A transformational step”
The company’s second-half earnings were driven by 30 per cent year-on-year revenue growth in its exclusive brands segment, and the launch of Kogan Marketplace in Q3, which generated nearly $12 million in gross transaction value in its first full quarter.
The company reported a 9 per cent year-on-year increase in gross transaction value in the second half. This includes transaction values of Kogan Marketplace, Kogan Mobile, Kogan Internet, Kogan Insurance, Kogan Travel and Kogan Retail.
“The launch of Kogan Marketplace is proving to be a transformational step for our business,” Kogan said.
“Marketplace gained momentum during the quarter and we have been overwhelmed by the response from both sellers and customers. Our team is working hard to onboard the backlog of sellers who want to reach the Kogan customer base.”
Kogan.com had 1.6 million active customers as at June 30, 2019, a 15.9 per cent increase from the previous year.
The online retailer is continuing its strategy of launching new verticals through partnerships with third parties. The first quarter of FY20 saw the retailer launch Kogan Energy and Kogan Cars. It also laid the groundwork to launch Kogan Mobile NZ, Kogan Credit Cards and Kogan Super.
Kogan.com is also preparing to the enter the US market through a US-based subsidiary, which will supply its private label products to US retailers on a wholesale basis. It has reportedly received its first orders from large retailers.
Meanwhile, in Australia, the company has expanded its logistics footprint to 13 fulfilment centres, enabling it to provide faster and cheaper delivery to more locations.