Motley Fool Australia

Kogan share price rockets higher after delivering impressive Q4 growth

Miniature shopping trolley filled with parcels next to laptop computer
Image source: Getty Images

The Kogan.com Ltd (ASX: KGN) share price is rocketing higher following an update on its fourth quarter performance.

In morning trade the ecommerce company’s shares are up 7.5% to a new record high of $18.65.

How did Kogan perform in the fourth quarter?

For the three months ending 30 June 2020, Kogan delivered further strong sales and profit growth compared to the prior corresponding period.

According to the release, gross sales grew by more than 95% and gross profit increased by over 115%.

Things were even better for its adjusted earnings before interest, tax, depreciation, and amortisation (EBITDA). Kogan’s adjusted EBITDA increased by more than 149% during the fourth quarter. This took its adjusted EBITDA growth to over 57% for the full year.

Pleasingly, although retail stores are now open largely as normal, this hasn’t slowed Kogan’s growth.

In the final month of the fourth quarter, Kogan reported gross sales of more than $94 million, gross profit of more than $17 million, and adjusted EBITDA of more than $7.9 million.

As a comparison, during the first two months of the fourth quarter, Kogan’s average run-rate of adjusted EBITDA was $7 million per month.

At the end of the financial year Kogan’s cash balance stood at $147 million. This includes the $100 million raised from its institutional placement, but not the $20 million from its share purchase plan.

Total inventories were $113.1 million at the end of the period, with $80.6 million in its warehouse and $32.5 million in transit.

What were the drivers of this growth?

The shift to online shopping and another solid increase in customer numbers helped drive this strong quarterly result.

Kogan’s active customers grew to 2,183,000 at the end of June, with net 109,000 active customers added during the month.

Founder and CEO of Kogan, Ruslan Kogan, commented: “In early July we celebrated four years since listing the Company on the ASX, and we are now proud to have delivered four consecutive years of significant growth in sales and earnings. Our business is booming as more customers than ever choose Kogan.com.”

Man who said buy Kogan shares at $3.63 says buy these 3 ASX stocks now

When investing expert Scott Phillips has a stock tip, it can pay to listen. After all, the flagship Motley Fool Share Advisor newsletter he has run for more than eight years has provided thousands of paying members with stock picks that have doubled, tripled or even more.*

In this FREE STOCK REPORT, Scott just revealed what he believes are the 3 ASX stocks for the post COVID world that investors should buy right now while they still can. These stocks are trading at dirt-cheap prices and Scott thinks these could really go gangbusters as we move into ‘the new normal’.

*Returns as of 6/8/2020

James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. owns shares of Kogan.com ltd. 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.

Related Articles...

Latest posts by James Mickleboro (see all)