Margin Expansion Underpins Solid Kogan Result

By Glenn Dyer | More Articles by Glenn Dyer

Electronics retailer Kogan has reported a strong full-year result for 2018-19 with revenues up 6.4% and net earnings after tax jumping an impressive 21.9%, indicating the company’s profit margins expanded during the year.

Revenue of $438.7 million was a bit short of market forecasts around $451 million but net profit of $17.2 million was at forecasts.

Gross sales rose 12% to $551.8 million from 2017-18’s $493 million and shareholders will get a 10% in total dividends for the year.

The shares jumped more than 10% in early trading but the early enthusiasm faded and they closed the session up more than 7.6% at $5.64 – that was still much better than the 0.8% rise in the ASAX 200.

Net revenues missed consensus estimates of $451 million, but profits were around market estimates of $17.3 million.

While Kogan did not provide any earnings guidance for 2020, the start of its financial year got off to a roaring start, with gross profit for July up 32% year-on-year, and comparable sales growth of 18.3%.

CEO and founder, Ruslan Kogan said in yesterday’s statement:

“In the 2019 financial year, we have continued our significant investments in our improved customer offering. We now have 13 distribution centres, enabling us to delight customers all over Australia and New Zealand with faster and more cost-efficient delivery options.

“We have also significantly expanded our product range, giving our customers more choice and driving more competition on our platform.”

“We now operate in more segments than ever with a very compelling offer in each segment. We have continued to invest in our brand and customer experience to drive our growing portfolio of businesses and improve our customer value proposition.”

“During the financial year, we also continued to lay the foundation for future growth by either launching or preparing for launch, a number of exciting new portfolio businesses – Kogan Cars, Kogan Credit Cards, Kogan Super, Kogan Mobile New Zealand and Kogan Energy.”

Dividend for the year was lifted 10% to 14.3 cents a share from 13 cents in 2017-18.

Glenn Dyer

About Glenn Dyer

Glenn Dyer has been a finance journalist and TV producer for more than 40 years. He has worked at Maxwell Newton Publications, Queensland Newspapers, AAP, The Australian Financial Review, The Nine Network and Crikey.

View more articles by Glenn Dyer →