Highlights:
- Online retailer, Kogan has registered a 106.7% drop in its adjusted NPAT in financial year 2022.
- Revenue of AU$718.5 million was down on FY21 by 8.0%.
- Gross profit was AU$184.4 million, adjusted EBITDA was AU$18.9 million.
Australian retail company, Kogan.com Ltd (ASX:KGN), on Tuesday (23 August 2022), has released its full-year results for the financial year 2022. The online retailer reported an 8% fall in its yearly revenue and a 9.3% decline in gross profit.
Kogan registered a negative statutory net profit after tax (NPAT) of AU$35.5 million during the stated time period.
Kogan shares were spotted trading 5.79% lower to AU$3.58 per share at 10:35 AM AEST. With this, in the last five trading sessions, the share price dropped by 15.17%. Year-to-date fall is 58.47%, and yearly fall is 72.73%.
Key highlights of Kogan’s FY22 performance
- Compared to FY21, the revenue of Kogan decreased by 8% to AU$718.5 million.
- The gross profit reached AU$184.4 million, a fall of 9.5%.
- Adjusted EBITDA declined from AU$61.8 million in FY21 to a negative AU$18.9 million in FY22, a drop of 69.4%.
- Adjusted NPAT tumbled by 106.7% to a negative AU$2.9 million.
- At 20 June 022, the cash balance of Kogan was AU$31.2 million.
- The company did not announce any dividend in FY22.
Concise explanation of Kogan’s loss
According to Kogan’s release, the financial year was impacted by the Covid-19 related issues and associated fluctuation in demand, leading to an increase in logistics and operating costs.
Inventory level and the associated cost seem to be an immense issue for the organisation. To address the excess inventory levels, Kogan did focus on promotional activities, which affected the gross margin and profit across third-party and exclusive brands.
At 30 June 2022, the company had AU$159.9 million in inventories with AU$22 million in transit and AU$137.9 million in the warehouse.
As per today’s announcement, the adjusted NPAT was driven by the unrealised losses on financial instruments, the provision for the likely payment of Tranche 3 & 4 of Mighty Ape, non-cash equity-based compensation and the domain sale of bitbuy.com.
Will the cost of Kogan First increase in future?
Through ASX announcement, Ruslan Kogan, CEO and founder of Kogan, informed the market that going forward, the group would increase the cost of access to Kogan First, considering the inflationary impact on delivery costs, evolution and increase of subscriber benefits, the cost will increase to AY$79.00 per year.
FY23 outlook
In FY23, Kogan would focus on the continuous expansion of its marketplace that includes the launch of an advertising platform, growth of Might Ape, growing Kogan First memberships and strong contribution from the company’s exclusive brand division.
Reportedly, the company has begun with the process of driving efficiencies in product ranges and operating costs to return to positive operating leverage.