In morning trade the Kogan.com Ltd (ASX: KGN) share price is shooting higher following the release of a business update.
At the time of writing the ecommerce company's shares are up 5% to $8.80.
Source: Kogan presentation
How is Kogan performing?
Last month Kogan released an update which revealed strong third quarter sales growth.
This was driven largely by a 50% jump in sales in March following the closure of retail stores nationally. Kogan's gross profit also grew by over 50% during the month.
Pleasingly, this strong form has continued into April and the company has seen its sales and gross profit growth accelerate.
According to the release, Kogan's sales grew by more than 100% in April compared to the prior corresponding period.
Things were even better in respect to profits. Its gross profit grew more than 150% and its adjusted EBITDA increased by more than 200% in April. This strong month means that Kogan's adjusted EBITDA is now up 40% financial year to date compared to the same period in FY 2019.
This was despite the company investing heavily in building its brand and growing its active customers with its largest ever monthly marketing expense in April.
It certainly appears to have paid off. Kogan grew its active customers by 139,000 during the month to 1,948,000 customers.
Long term incentive plan.
In addition to its business update, the company advised that the Remuneration Committee is proposing to introduce a long term incentive (LTI) plan for its executive directors, Ruslan Kogan and David Shafer.
Kogan Chairman Greg Ridder explained: "Ruslan and David are outstanding business leaders. They have been fundamental in building and growing the high performing company we see today, and shareholders have been rewarded with an exceptional return on their investment since IPO."
"Recent performance of the Company highlights the solid foundations of our business – with strong customer appeal, multiple revenue streams, diverse supply chains, and world-class proprietary systems and processes. The proposed LTI grant (which will be by way of options over ordinary shares) involves at-risk equity with an additional service condition of at least three years."
"Other than usual annual reviews, no changes to the modest fixed remuneration of Ruslan and David are proposed. The Remuneration Committee has received advice from an independent expert and believe that the proposed option grant will generate long term shareholder value. We believe the grant is in the best interests of all shareholders," he concluded.
