Kogan Defies Critics With 37% Increase In Revenues

Online retailer Kogan has silenced his critics including ChannelNews by significantly outperforming his forecasts.

The Melbourne based online retailer has reported revenues of $289.5 million, up 37.1 per cent on a year ago.

Tipped to suffer with the arrival of Amazon Kogan has in his first year grown his active customer base by 36% to 955,000 helped in part by the Companies acquisition of the Dick Smith online operation. The company has also built up a strong war chest of $32M which they could come under attack when Amazon arrives.

EBITDA is up 230 per cent to $13.2m and up 91.3 per cent on prospectus forecasts.

The FY17 results are significantly higher than what the company had forecast in its prospectus last year, across the board.

Company CEO Ruslan Kogan said investment in inventory was a key driver for Kogan.com’s IPO and he believes inventories are now at a strong and sustainable level to drive growth in FY18.

The Dick Smith business had come under fire for overspending in the months prior to its collapse, with investors complaining of a ballooning inventory claims The Australian.

“Kogan.com has delivered a strong result for the full year,” Mr Kogan said. “The company has a strong balance sheet which will allow us to continue to fund growth in our core Kogan Retail businesses, while the continued diversification of our Kogan Portfolio is providing strong cash flows.

“Our team is very proud of the fact we’ve managed to build and engineer a business model that is both a high-growth and dividend-paying company.”

Mr Kogan said focus on FY18 was on expanding the Kogan Retail Private Label range, a ramp up of Kogan Insurance in partnership with Hollard Insurance, launching Kogan Broadband in partnership with Vodafone and continued investment in brand-building to drive revenue per customer.

Kogan was founded in 2006 and listed on the ASX in July 2016; it sells electronics, home appliances, mobile, grocery and travel products direct to consumers through its website.

The company declared a fully franked dividend of 3.80 cents per share, bringing total fully franked dividends for FY17 to 7.70 cents per share.

As of 10.30am (AEST), shares in Kogan had jumped 7.5 per cent to $2.58.