Net profit after tax (NPAT) has plunged 86.8% to $3.5 million at Kogan.com due to unexpected costs relating to inventory, logistics and the acquisition of Mighty Ape during FY21.
The company forecasted levels of demand in the first half to continue into the second half, and potentially grow further, so invested in inventory and operational capacity to fulfil the growth. However, consumer demand did not increase at the forecasted rate.
As a result, excess inventory significantly increased storage costs, driving an overall increase in variable costs to $44. 9 million, coupled with subsequent marketing costs through promotional activity.
Kogan.com also incurred logistics detention charges totaling $7.7 million, as a result of Covid related warehousing and supply chain interruptions from late 2020 to April 2021. People costs of $12 million to provision for the likely payment of Mighty ape purchase price instalments as well as $800,000 relating to acquisition costs.
Without these unexpected costs, adjusted NPAT was up 43.2% to $42.9 million.
Gross sales surpassed $1 billion for the first time, increasing 52.7% year-on-year, with gross profit up 61% to $203.7 million.
Kogan.com active customers surged past three million, growing 46.9% to 3.2 million, while Mighty Ape active customers reached 764,000 at 30 June 2021.
Exclusive brands continued to achieve year-on-year revenue growth up 62.5% on FY20 and contributed more than half (51.6%) to the group’s overall gross profit in FY21.
Kogan Marketplace gross sales increased by 91% compared to FY20 as seller numbers continue to grow with a strong pipeline of new sellers ready to be onboarded. Kogan Marketplace expanded into New Zealand in June 2021.
The Kogan First loyalty program reached 120,000 members, at 30 June 2021, demonstrating stronger loyalty and repeat purchase behaviour than non-members.
“While we recently celebrated our 15th birthday, we feel like we’re just getting started. Over the next year, we’ll be rolling out new and exciting projects to further support our loyal Kogan community with Kogan First membership rewards, new and improved delivery solutions, and further enhancements to the online shopping experience,” Kogan.com founder, Ruslan Kogan said.
“Over the past 18 months we have witnessed a massive swing towards the ecommerce retail revolution, one Kogan.com has been ready and waiting for, for well over a decade. We look forward to continuing to delight our customers by making the most in demand products and services more affordable and accessible.”
Unaudited management accounts have shown a 5.1% year-on-year sales increase in July 2021 and the first 18 days of August 2021 accelerated sales growth to 24.5% above July.