Kogan share price on watch after first half update

The Kogan.com Ltd (ASX:KGN) share price will be on watch on Monday after the release of its first half update…

| More on:
a woman

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

The Kogan.com Ltd (ASX: KGN) share price will be on watch this morning following the release of its first half update.

How did Kogan perform in the first half?

During the first half of FY 2020 Kogan reported its biggest half of gross sales and gross profit. This was driven by record sales during Black Friday and Boxing Day.

For the six months ending December 31, Kogan's gross sales grew by more than 16% over the prior corresponding period. Gross profit grew a touch slower and was up more than 9% on the first half of FY 2019.

The latter is a slowdown on its first quarter growth. During the first quarter gross profit was outpacing its gross sales with growth of 28% over the prior corresponding period.

One area of its financial performance that improved during the second quarter was its operating costs. Management revealed that they declined marginally over the period.

Combined, this led to Kogan finishing the period with cash of $34.1 million.

Customer delight.

Kogan's founder and CEO, Ruslan Kogan, was pleased with the company's performance in the first half.

He said: "We are proud to have delivered another record half in Gross Sales and Gross Profit, all while undertaking significant investments into the future of the business. The projects that we have rolled out in 2019 will pave the way for the business over the coming years — these include Kogan Marketplace, Kogan First, Kogan Credit Cards and Kogan Energy. We are investing into building strong customer relationships in these new divisions. We expect these divisions to delight our customers and drive loyalty over many years."

Speaking of which, customer numbers increased 10% year-on-year to 1,699,000 during the first half.

Mr Kogan was also pleased with the performance and prospects of the Kogan Marketplace business.

"As we introduce new sellers to the Kogan Marketplace, and rapidly grow that division, we are undergoing a period of transition to an e-Commerce company that is no longer constrained by inventory and is capable of infinite growth without additional capital. In the long term, this creates huge benefits to both our customers and our shareholders as we build one of the major e-Commerce marketplaces in Australia and New Zealand," he added.

In the second quarter the Kogan Marketplace grew its gross sales by more than 44% on the prior quarter.

Outlook.

The CEO appears confident that there's more to come from Kogan Marketplace and the rest of the business.

"We're pleased to have shareholders and partners alike that support our strategy of investing in the long term future of our business. We're just at the very beginning of seeing the benefits from our major investments in warehousing and infrastructure for faster delivery, in Kogan Marketplace for greater product variety, Kogan First for rewarding loyal customers, and more. We're just getting started, and we look forward to delighting our customers with the benefits of these strategic investments for years to come," Mr Kogan concluded.

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia has recommended Kogan.com ltd. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

More on Share Market News

A happy young couple lie on a wooden deck using a skateboard for a pillow.
Share Gainers

These were the best-performing ASX 200 shares in March

These shares made their shareholders smile in March thanks to some very big gains.

Read more »

Businessman using a digital tablet with a graphical chart, symbolising the stock market.
Opinions

2 ASX shares I have been buying in 2024!

I’m a believer in the long-term outlook of these stocks.

Read more »

Stock market chart in green with a rising arrow symbolising a rising share price.
Share Gainers

Here are the top 10 ASX 200 shares today

It was a massive day for the ASX 200, with a new all-time high recorded.

Read more »

A man sits thoughtfully on the couch with a laptop on his lap.
Technology Shares

This ASX tech stock rocketed 60% in March! Can it keep on delivering?

After soaring in March, the ASX tech stock is now up 169% since this time last year.

Read more »

Broker Notes

Brokers name 3 ASX shares to buy now

Here's why brokers are feeling bullish about these three shares this week.

Read more »

A young man clasps his hand to his head with his eyes closed and a pained expression on his face as he clasps a laptop computer in front of him, seemingly learning of bad news or a poor investment.
Share Fallers

Why Burgundy Diamond Mines, Clarity Pharmaceuticals, EML, and Zip are sinking today

These ASX shares are ending the week in the red. But why?

Read more »

A young women pumps her fists in excitement after seeing some good news on her laptop.
Share Gainers

Why Mesoblast, Newmont, Pilbara Minerals, and Platinum shares are jumping

These ASX shares are ending the week strongly. But why?

Read more »

a young boy dressed up in a business suit and tie has a cute grin and holds two fingers up.
Opinions

2 of my top ASX 200 shares to consider buying before April

I would happily exchange dollars for these two shares right now.

Read more »