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Kogan.com (ASX:KGN) share price on watch on huge HY21 growth

The Kogan.com Ltd (ASX:KGN) share price is on watch after reporting a large amount of growth in its FY21 half-year result. 

The Kogan.com Ltd (ASX: KGN) share price is on watch after reporting a large amount of growth in its FY21 half-year result.

Kogan.com is a major e-commerce business in Australia.

Kogan.com HY21 result

In the first six months of FY21, its gross sales went up by 97.4% to $638.2 million. Revenue grew by 88.6% to $414 million.

Gross profit rose by 126.2% to $112.9 million. Adjusted EBITDA (EBITDA explained) rose by 184.4% to $51.7 million and adjusted net profit after tax (NPAT) grew 250.2% to $36.5 million. Adjusted profit / earnings per share (EPS) grew by 211.7% to $0.35.

Statutory NPAT grew by 164.2% to $23.6 million.

One highlight during this period was a record breaking Black Friday trading period with 7 of the 10 biggest trading days ever occurring within the period surrounding Black Friday.

Excluding Mighty Ape, Kogan.com customers went up by 76.8% to 3 million at 31 December 2020. Mighty Ape active customers increased to 719,000.

Kogan.com said that Exclusive Brands achieved revenue growth of 114.9% and gross profit growth of 174.9%, making up 55.9% of overall gross profit. Third party brands saw revenue growth of 50.5% and gross profit rose 77%.

Kogan Marketplace saw gross sales increase by 194.3%. It has increased the number of sellers significantly, with a strong pipeline of new sellers. It continues to invest in this platform which can achieve ongoing growth without the increase in inventory.

Looking at other divisions, Kogan Mobile grew 12.9% year on year, contributing 4.8% of total gross profit. Kogan Internet customers went up 17.9% year on year.

Mighty Ape delivered strong sales over the Christmas peak trading period, with revenue and gross profit of $20 million and $5.4 million respectively.

Kogan.com dividend

The company’s board declared a fully franked interim dividend of 16 cents per share, up 113.3% compared to the prior corresponding period.

Outlook

Kogan.com plans to further expand its exclusive brands, develop the Kogan Marketplace and integrate Mighty Ape in the second half of the year.

In January 2021, the company saw gross sales go up 45% year on year. There was 111.6% growth in Kogan Marketplace and 54.6% growth in exclusive brands. However, there were some declines like travel and insurance (including travel insurance).

Gross profit was up more than 102% year on year and adjusted EBITDA went up 90% compared to last year.

This was a very strong result in my opinion, considering Australia retail shops are largely open again. At the pre-open share price of $15.60, I think Kogan.com looks like an attractive long-term idea to think about with its growing Marketplace, the Mighty Ape acquisition, rising margins and growing dividends. I don’t think the e-commerce trend is going to unwind, just slow down from here. Short term price weakness could be a useful time to think about Kogan shares.

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