Kogan continued to grow net profit during FY2020

Online retailer Kogan continued to increase its net profit after tax, amassing AU$26.8 million for the 2020 financial year -- a jump of 56% from the previous financial year.

Gross sales and revenue for the year were AU$769 million and AU$498 million, respectively, which are increases of 39.3% and 13.5% from the prior year.

The company also saw its active customer base expand during FY2020, with Kogan reporting it has 2.18 million customers as of 30 June 2020. By comparison, the online retailer had 1.6 million customers at the same time a year prior.  

Meanwhile, gross profit was up 39.6% year-on-year to AU$126.5 million, while adjusted earnings before interest, tax, depreciation, and amortisation (EBITDA) grew 57.6% year-on-year to AU$49.7 million.

The majority of Kogan's gross profit continued to come from its products division. Within the products division, "exclusive brands" experienced 26.4% year-on-year revenue growth to contribute 51.3% of the company's overall gross profit for FY20. At the same time, third-party brands chipped in almost 20% of the company's overall gross profit. 

The company also reported that Kogan Marketplace performed better during the latter half of FY 2020, with gross sales rising by 71% to around AU$90 million when compared to the first half of the year. This culminated in Kogan Marketplace providing around 10% of the company's overall gross profit. 

"Kogan Marketplace was a standout performer during the year, exceeding all our expectations and providing our customers with more choice than ever. Importantly, the emergence of Kogan Marketplace has made Kogan.com even more scalable by enabling us to grow infinitely without a corresponding investment in inventory," Kogan founder and CEO Ruslan Kogan said. 

For Kogan's other verticals, Kogan Internet saw its customer base and revenue grow by almost 91% and 145% year-on-year, respectively, while Kogan Mobile's revenue remained steady to contribute around 10% of the company's gross profit.

The services of Kogan Internet and Kogan Mobile are provided by Vodafone, which provides licensing fees to Kogan to use its brand.

Kogan Insurance also grew during FY20, with its commission-based revenues growing 36% when compared to the prior year.

The remaining verticals -- Kogan Cars, Kogan Credit Cards, Kogan Superannuation, Kogan Energy, and Kogan Mobile NZ -- which all launched during the first half of FY2020, are also growing, the company said.

According to Kogan, business growth "accelerated significantly" during the second half of the financial year. 

"There is a retail revolution taking place as more and more shoppers learn about the benefits of eCommerce. We're seeing record numbers of first-time customers, who then go on to make repeat purchases at a 40% faster pace than previously," the CEO said.

"For us, this is a very exciting trend that shows that once customers learn about shopping online, they change their ongoing behaviour."

In particular, the company's gross profits doubled during the fourth quarter when compared to the same period last year. During that same quarter, Kogan's gross sales also grew by 95% year-on-year, while adjusted EBITDA experienced an almost 150% year-on-year increase.

Kogan's results come shortly after the Australian Federal Court found the company misled customers during a four-day sale from last year. 

The online retailer hiked the prices of over 600 products and then promoted "discounts" for these products. Shortly after the sale ended, Kogan proceeded to reduce the prices of the affected products back to their pre-promotion prices.

"All businesses must ensure that their advertisements do not mislead consumers about the nature of a promotion, and that any promised savings are genuine," Australian Competition and Consumer Commission chair Rod Sims said.

The Australian Federal Court has ordered that Kogan be fined for this false and misleading conduct, with the amount to be finalised in the coming weeks.

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