Kogan plunges on half-year results

The Kogan share price has been hit again following the release of their half-year results. Upon the market opening Friday, Kogan shares plunged 20% to a new 52-week low of $4.50. This price represents over a 70% decrease in the share price over the last 12 months. However, upon market close, the share price recovered to $5.26 ending the day only 6% down.

For the half-year, Kogan reported a 1.3% lift in total revenue to $419.5 million. Despite this growth, this was primarily due to acquisitions such as Mighty Ape as opposed to natural growth.

Further to this, shareholders were surprised by the unexpected 66% decrease in adjusted earnings coming down to $17.4 million. The company’s profits were hit by $13.6 million in compensation expenses primarily due to the $10.4 million payments to their Mighty Ape NZ business.

All this was despite Kogan reporting a 10.4% year-on-year increase in active customers to 3,314,000 (excluding Mighty Ape) and a 176% lift in Kogan First loyalty customers to over 274,000 subscribers. Overall, the company reported a net loss after tax of $11.9 million. This represents a decrease of $35.5 million compared to their half-yearly profit of $23.6 million a year earlier.

Trading Update and Outlook

Shareholders will be looking for a dramatic turnaround in the second half of the financial year and earnings will be closely watched going forward. Despite the lackluster results, strong customer activity and signups will be pivotal to long-term growth.