Kogan shares gain 4.5% following positive Q4 business update

Here’s everything you need to know about Kogan’s just-released July business update.

Kogan ASX Source: Bloomberg

The share price of Kogan Australia Pty. Limited rose as much as 4.62% during today’s trading session following the release of an impressive Q4 business update.

Although Kogan’s share price has come under pressure in the last 12-months, today's strong results, though unaudited, may help to alleviate some of the concerns investors previously had.

Speaking of the Q4 release, Ruslan Kogan, the company’s founder and CEO said:

‘In contrast to what has been reported as a tough retail environment, we have been able to grow the business and earnings while investing significantly in the Kogan.com customer experience.’

A solid financial outcome

Even in the face of a challenging retail environment, on an unaudited basis, Kogan has been able to generate impressive growth in the 2019 financial year.

Comparing 2HFY19 to 2HFY18, Kogan’s gross profit growth and gross transaction value growth both came in 12% and 9% higher, respectively.

The company was also successful at decreasing its operating costs by 2%, year-over-year.

Yet maybe most importantly, Kogan saw a 15.9% increase in active customers, year-over-year. As it stands, there are now 1,609,000 users in the Kogan ecosystem.

Why these numbers really matter

Though Kogan was started primarily as an e-commerce retail business – a key strength of the company in recent times has been its ever-increasing line-up of new business offerings.

For instance, Kogan’s expansion into the mobile, internet and insurance businesses have already proven to be an impressive driver of growth for the company.

Kogan Mobile grew its customer base by 24.4% year-over-year. Kogan Internet did even better, growing its active customer base by a massive 273% in that same period.

Though investors may have been sceptical of the company's ability to effectively branch out into different areas, the above results paint a positive picture of Kogan’s capacity to successfully execute on its aggressive expansion plans.

Where is Kogan heading next?

Ultimately, the company looks well-positioned to capitalise and expand on further business opportunities as they arise.

Not only does Kogan currently have A$27.5 million in cash, A$75.7 million in total inventories and no bank debt (on an unaudited basis), the company also has a number of promising ventures that are soon to be launched.

Kogan is set to expand into the credit card business, the energy sector and even superannuation in the near-term.

As CEO and founder Ruslan Kogan himself said:

‘We have a very exciting pipeline of new business units that will delight customer in even more way and bring more competition to some very important industries.'

Since January the Kogan share price has climbed 49%.

Kogan Australia Pty. Limited plans to release its full-year results next month.


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