Online discount retailer Kogan has recorded strong growth in sales and revenue for the year to the end of June, with revenue of $211.1 million up 5% on prospectus forecasts for the company’s debut as a public company on the ASX in July.
The strong results and forecasts include a 23% lift in Kogan's 2017 earnings guidance.
Kogan (ASX:KGN) also reports that pro-forma EBITDA of $4 million was up 37.9% on the prospectus, and it recorded a 2016 net profit of $800,000 – up on the prospectus forecasts by 100%.
Kogan chairman Greg Ridder says, in the five months since the listing of the company the funds raised have begun to be utilised by the business through investment in inventory and marketing.
{loadposition peter}Kogan listed with a market capitalisation of $168 million following an IPO which raised $50 million, and was four times oversubscribed with institutional investors taking up 30% of the business at $1.80 a share.
On the results announced on Friday, Ridder said the company believed by releasing capital restraints the business will be able to deliver on growth targets and objectives.
“These results reflect the significant work undertaken by the Kogan.com team to grow your company’s active customer and subscriber base –both organically and via expansion strategies, Ridder said in his report to the company’s AGM.
“During the financial year, the team successfully acquired and integrated the Dick Smith online business and expanded your company’s reach into new verticals including Kogan Mobile and Kogan Travel.
“These carefully-executed growth initiatives, combined with significant investment in systems and automation, have allowed Kogan.com to deliver a strong maiden result for shareholders.”
Ridder said the Australian online retail market continues to grow rapidly and Kogan believes it “remains underpenetrated compared to other developed economies”.
Ridder cited Euromonitor estimates that the Australian online retail market was valued at $17 billion in 2015, and is forecast to grow at a compound annual growth rate (CAGR) of 11.5% in the period through to 2019.
“The Board is confident in Kogan.com’s growth strategy and believes that the business has a strong platform from which to expand. Kogan.com’s growth initiatives are designed to support its vision to further consolidate our position as Australia’s largest pure play online retail wesbite through leveraging its core business strengths.”
Ridder said the majority of funds raised from Kogan’s recent IPO are being invested in accelerating the company’s growth strategy, including investment in new Private Label products and marketing.
“Over the medium term, your company will also assess new business verticals that can scale with the Kogan community and potential industry consolidation opportunities,” Ridder told shareholders at the AGM.
Kogan now claims almost one in six Australians subscribed to its community.
At listing, Ridder said integration of the Dick Smith online assets — not reflected in the forecasts in the prospectus — would add 1.3 million members to the company’s existing database of approximately 2.3 million email subscribers.