Kogan To Pay A Dividend & Launch NBN Offering
Kogan is set to shake up the NBN broadband market, with an offering that he claims will be “highly” competitive and will put pressure on current operators.
Speaking at CES, Kogan CEO Ruslan Kogan has also told ChannelNews that he will be the first online business in Australia to offer a dividend when he reports his results shortly.
He said that the arrival of Amazon in November had “boosted” sales for the brash online retailer and that his next lot of results will reflect a marked increase in trading.
He said that in 2018 he is tipping that sub $200 high quality drones and Google Sound speakers will be hot sellers following his visit to the world’s biggest tech show.
He also tipped Android TV to be popular claiming that most current smart TV’s were “rubbish”.
He said, “We had excellent trading running into the peak Christmas New Year buying period and we will be the first e commerce Company to pay a dividend”.
Known for his data analytic skills Kogan said that he was limiting the amount of trading intelligence that he gave away.
He said that in an online environment information and data analytics was critical and the recent move by Harvey Norman to follow the lead of JB Hi Fi and The Good Guys to stop supplying retail sales data to European research group GFK was “smart”.
Kogan who has over one million customers believes that he can shakeup the NBN broadband market without the overhead baggage that other operators are carrying.
Kogan Mobile which runs on the Vodafone network has been extremely successful for Kogan with his set to benefit from an “attractive” NBN broadband offer.
He also said that his relationship with Medicare which allows him to offer medical benefits packages was also delivering for his online business.
He said recently, that despite the recent surge in online shopping, Kogan believes online shopping’s potential is “probably somewhere between 20 and 40%” of traditional retail and won’t fully replace the experience of going into a store.
“Our business is commodity-based products so it’s all around efficiency. It’s ‘Hey I know what I want, and I’ve got a very busy schedule, any spare time I’ve got I’d rather be playing with the grandkids in the park rather than trying to find a parking spot.’ So, you know, it serves both purposes. [And] there’s bricks and mortar [business], those who do it really well and their businesses are thriving.”
Kogan’s share price surged over 360% in 2017, from $1.34 at the beginning of the year to close last night at $6.34 It now has a market cap of $579 million, which is greater than Myer Holdings Ltd’s (ASX: MYR) $501 million, and places it just inside the ASX300 as of December 22.
Its full year FY17 financial results were particularly strong, driven by a 36% increase in active customers for the year.
Pro forma EBITDA of $13.2 million represented an increase of 230% on the prior year, and beat its prospectus forecast by 91.3%.
Pro forma NPAT was $7.2 million, 188% higher than forecast.
Adjusting for costs associated with the company’s 2016 IPO as well as unrealised FX gains, statutory NPAT of $3.7 million represented an increase of 363% on FY16.
Gross margin for FY17 was 17.9%, which was again higher than forecast, by a full 2.7%.