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KGN

Kogan.com Ltd Plummets 5.5 Per Cent On The Back Of 1H FY20 Results

Tumul Sinha

Tumul is an experienced Equity Analyst with ASR Wealth Advisers. She holds a Master’s Degree in Finance from the University of Sydney. Her key industry verticals include Real Estate, Health Care and Technology.

Kogan.com (ASX: KGN) has released its half-year results for the period ending 31 December, 2019 to the market today. The business reported revenue of $219.5m and adjusted EBITDA of $18.2m, which are ahead of analyst expectations of $216m and $17.7m, respectively. For Kogan and their investors alike, it is good to see that repeat business is growing along with average gross sales per customer. Exclusive brands now form 46% of gross profit and third-party brands represent 20.8%. Furthermore, KGN has declared an interim dividend of 7.5 cents per share, in line with consensus expectations.

 

KOGAN 1H FY20

Kogan.com has fallen 5.5 per cent on the back of releasing its 1H FY20 results, despite reporting an adjusted EBITDA of $18.2 million, a 2.8% beat on consensus expectations of $17.7 million. (Credit: Kogan.com).

 

Kogan’s trading update on 20 January was the first time the market saw a slowed growth rate in its Exclusive Brands segment, which is their largest segment. The market appeared to have expected more colour on the reasoning for this in their announcement. However, the business has not provided any explanation for this, aside from saying the segment:

continued to achieve year-on-year revenue growth.

 

This appeared to concern investors, as the segment may be seeing some cannibalisation. Kogan.com did not provided a clear outlook for the full-year, however it will continue to announce trading updates, as per usual. KGN did mentioned there may be a 2H20 impact to earnings if there are sustained closures in China due to coronavirus, as this will cause delays of orders.

The market reacted unfavourably to the announcement, with stock undergoing a heavy sell-off. The price is now down below $5 per share, representing a 5.5% fall from market close yesterday at $5.25, given the uncertainty around top-line growth visibility.


 

Disclaimer:

This article has been prepared by the Australian Stock Report Pty Ltd (AFSL: 301 682. ABN: 94 106 863 978)

(“ASR”). ASR is part of Amalgamated Australian Investment Group Limited (AAIG) (ABN: 81 140 208 288 Level 13, 130 Pitt Street, Sydney NSW 2000).

This article is provided for informational purpose only and does not purport to contain all matters relevant to any particular investment or financial instrument. Any market commentary in this communication is not intended to constitute “research” as defined by applicable regulations. Whilst information published on or accessed via this website is believed to be reliable, as far as permitted by law, we make no representations as to its ongoing availability, accuracy or completeness. Any quotes or prices used herein are current at the time of preparation. This document and its contents are proprietary information and products of our firm and may not be reproduced or otherwise disseminated in whole or in part without our written consent unless required to by judicial or administrative proceeding. The ultimate decision to proceed with any transaction rests solely with you. We are not acting as your advisor in relation to any information contained herein. Any projections are estimates only and may not be realised in the future.

ASR has no position in any of the stocks mentioned.

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