The Kogan.com Ltd (ASX: KGN) share price is moving higher today after the online retailer revealed its results for the half-year period ending December 31 2016. Below is a summary of the results with comparisons on a pro forma basis to the prior corresponding half.
- Adjusted pro forma trading EBITDA of $7.3m, versus $2.6m
- Pro forma trading net profit of $3.7m, versus $1.3m
- Revenue of $143.9m, versus $104.7m
- Active customer base of 830,000, up 18.2% from 30 June 2016
- Maiden interim dividend of 3.9cps
- Net cash on balance sheet of $26.5m,
- Upgraded guidance for full year adjusted EBITDA to between $10.5m to $11.5m
Kogan.com is a discount retailer of a wide variety of popular household and electronic goods that it normally buys and then imports from overseas, before selling on at a margin to Australian consumers at still relatively cheap prices.
While it has always sold many popular electronic brand names like Samsung, Apple, Phillips, LG, Sony and Microsoft it has used much of its initial public offer proceeds to invest heavily into its own private label brands that are delivering much of the sales and margin growth, with its private label business now contributing over half its gross profit.
It also operates a successful budget mobile business where it piggybacks off the Vodafone 4G network in offering budget conscious consumers or short-term visitors pre-paid sims, top ups, and handsets at competitive prices. In that sense it is starting to compete with the leader in the mobile virtual network operator space Amaysim Australia Ltd (ASX: AYS), which rents the Optus network to provide connectivity to its customers.
Outlook
Kogan is an interesting tech business led by a young and entrepreneurial founder that deserves great credit for beating its prospectus forecasts. It operates in the competitive but fast-growing online retail space and so far has a strong track record. One risk on the horizon is the potential arrival of US$414 billion juggernaut Amazon.com, but that is a way off in the future yet.
Other online marketplaces to report recently include Kiwi operator Trade Me Group Ltd (ASX: TME), while jobs marketplace Freelancer Ltd (ASX: FLN) is up 5.7% after also reporting a better-than-expected result today.
