Kogan shares surge 17% after declaring profit
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The news: Kogan shares climbed more than 17% in early trading after the online retailer announced a return to profitability in the half to December 2023.
The numbers: Before the market opened, Kogan reported a 136.4% rise in net profit after tax. The company posted an $8.7 million profit during 1H24 compared to a $23.8 million loss during 1H23. It also reported a 184.2% rise in first-half EBITDA to $19.4 million.
However, revenue dipped 9.9% to $248.2 million, with Kogan citing cost-of-living pressures for the drop.
The company reinstated an interim dividend of 7.5 cents per share, its first in three years.
Shares in the company surged 17% to $7.16 by 11:00am AEDT.
The context: The Melbourne-based retailer attributed the reduction in gross sales and revenue during the period to a strategic transition to platform-based sales, as well as the company's reduction in surplus inventory, both of which were factors in Kogan's return to profitability.
On Sunday, The Australian reported that Kogan had been swindled by a US supplier for over $232,000 worth of goods. The online retailer is pursuing a US businessman named Harish ‘Harry’ Chatlani in California courts, after Kogan placed orders with the supplier between 2020 and 2022, which were missing items, never arrived or paid for twice.
What they said: While Jarden analysts said it posted a "strong trading update" that implied an upgraded to expectations for the second-half, they were still concerned with market share loss.
"We are still concerned by apparent share losses to Amazon/ Temu and continue to watch for exclusive brands and third-party brand sales growing in tandem with marketplace sales, and evidence of sustained stabilisation in customer acquisition cost and marketing cost cuts not resulting in slowing sales growth," they said.
The source: ASX announcement
