Kogan share price jumps 14% on massive profit rebound and dividend return

This ecommerce company's sales are down but its profits are surging.

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The Kogan.com Ltd (ASX: KGN) share price is racing higher on Monday.

In early trade, the ecommerce company's shares are up 14% to $6.98.

Investors have been buying its shares in response to its half-year results.

Kogan share price jumps on half-year results

  • Gross sales down 5.6% to $446.6 million
  • Revenue down 9.9% to $248.2 million
  • Gross margin improved 13.2 percentage points to 36.1%
  • Gross profit up 42.2% to $89.5 million
  • Adjusted EBITDA of $21.5 million (from $4.4 million loss)
  • Net profit after tax of $10.2 million (from $9.6 million loss)
  • Fully franked interim dividend of 7.5 cents per share

What happened during the half?

For the six months ended 31 December, Kogan reported a 9.9% decline in revenue to $248.2 million.

Management advised that this reflects the strategic transition to Platform-based sales, as well as the reduction in surplus inventory to realign the business with current trading conditions. This offset revenue growth in Verticals, FIRST, and Advertising segments.

The highlight of the result is arguably its gross margin, which lifted by 13.2 percentage points to 36.1%. This is the result of Kogan.com Product Division profitability recovering following the optimisation of inventory and focusing on platform and software-based subscription revenue.

This underpinned a half-year net profit of $10.2 million, which is up strongly from a $9.6 million loss a year earlier.

In light of this return to profit, the company's board declared its first dividend since 2021. A 7.5 cents per share fully franked interim dividend was declared.

Management commentary

Kogan founder and CEO Ruslan Kogan welcomed the company's turnaround. He said:

While our business transformation to a more efficient, platform and software based model is in its early days, it's promising to see that it's starting to pay dividends.

We've recently launched Mighty Ape's first Vertical, Might Mobile, as well as our Advertising Platform which is supporting sellers on our Marketplace. In addition, we've delivered more savings and benefits to our customers, in particular our fast-growing Kogan FIRST Subscribers.

All these and more help us run a better business for you, our shareholders, while creating the best value for millions of customers. Kogan.com is about to turn 18 and I've never been more confident about the outlook for our business and its ability to deliver remarkable value.


Potentially giving the Kogan share price an added boost this morning has been the company's outlook commentary.

Management advised that January's unaudited management accounts showed group adjusted EBITDA of $4.9 million.

Looking ahead, the company expects its Platform-based sales contribution to continue growing and driving gross margin improvement.

It also expects continued profitability improvement within the Kogan.com Product Division, accelerated growth of the newly launched Advertising Platform and Mighty Mobile, continued growth of the Verticals and further enhancements to Kogan FIRST.

The Kogan share price has almost doubled over the last 12 months.

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has positions in and has recommended Kogan.com. The Motley Fool Australia has recommended Kogan.com. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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