Kogan.com (ASX: KGN) is currently in trading halt pertaining to an equity raise and have also provided a presentation to investors regarding the company’s current position and future outlook. Both announcements are price sensitive and thus, we expect some considerable price movement when trading commences again on Thursday 11 June. To provide some background, Kogan.com is an Australian portfolio of retail and services businesses including Kogan Retail, Kogan Marketplace, Kogan Mobile, Kogan Internet, Kogan Insurance, Kogan Health, Kogan Pet Insurance, Kogan Life Insurance and Kogan Travel. The company has a market capitalisation of A$1.194 billion and is trading at near all-time highs at $12.38 per share (a 226%+ increase from its COVID-19 low in mid-March).
Kogan.com (ASX: KGN) has launched an equity raise and provided a presentation to investors regarding the company’s current position. (Source: Kogan.com).
KGN announced an equity raise shortly before market open this morning, which consists of a $100 million fully underwritten placement on offer at $11.45 per share (a 7.5% discount to the last close price at Tuesday 9 June 2020 of $12.38), as well as a non-underwritten share purchase plan to raise up to $15 million. In the company’s announcement, however, the description of the use of the proceeds was rather vague. Kogan.com claims that the capital from the raise will be used to
provide financial flexibility to act quickly on future value accretive opportunities
leading some investors to believe that the raise could just be an opportunity to cash in on the recent rapid increase in share price as of late.
In KGN’s investor presentation, the company announced that they have achieved gross sales year-on-year growth of 103.6% across April and May 2020, as well as adjusted EBITDA year-on-year growth of 219.3% across the same period. The company prides themselves on being highly cash generative and therefore not needing to raise capital (despite paying out regular dividends), which is why the latest announcement came as a surprise to some investors. Between listing in July 2016 and its current levels in June 2020, Kogan.com has delivered an impressive total shareholder return of 654.5%.
This article has been prepared by the Australian Stock Report Pty Ltd (AFSL: 301 682. ABN: 94 106 863 978)
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