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Kogan Dumps Dividends, Cuts Staff To Increase Profits

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Kogan Dumps Dividends, Cuts Staff To Increase Profits

CTN NEWS –  Kogan.com founder and chief executive Ruslan Kogan will not pay a final dividend to preserve cash and is cutting staff numbers as he looks to further slash costs and product ranges this year to return to profitability.

The e-commerce and marketplace player declined to provide any 2023 guidance.

But Mr. Kogan said the business was aiming to return to positive operating leverage after cutting costs and underperforming product ranges, which had led to adjusted earnings bouncing back in the fourth quarter of 2022.

Kogan Annual net profit ($m)

In July, unaudited accounts showed adjusted earnings before interest, tax, depreciation, and amortization (EBITDA) of $1.5 million, with operating costs further reduced by 19.3 percent year-on-year.

Kogan had largely pre-released its full-year 2022 results in late July when it flagged gross sales were virtually flat at $1.18 billion in the year. Shares in the retailer plunged 5.3 percent to $3.58 in early trade on Tuesday.

Revenue fell 8 percent to $718.5 million, which only includes revenue from Kogan Retail and commissions from marketplace sellers.

Underlying EBITDA fell 69 percent to $19.1 million in the year. Full-year gross profit fell 10.3 percent to $184 million.

Mr. Kogan noted the business was caught with too much inventory in 2022 but was able to recover profitability in the second half of this year. A $3.8 million profit in 2021 was followed by a $36.2 million loss in 2022.

At a glance | Kogan

Table with 4 columns and 5 rows. Currently displaying rows 1 to 5.
Revenue ($m) 718.5 780.7 −8.0
Pre-tax profit ($m) -42.7 11.3 −477.9
Net profit ($m) -35.5 3.5 −1103.7
Final dividend (¢) nil nil
Date dividend payable n/a

The company sources furniture and homewares from more than 100 factories, mainly in Asia, and has more than 200,000 individual products in its range.

They noted that “Australian online sales penetration is back to the pre-COVID run-rate, suggesting no structural acceleration from COVID”. The exception was food, which was still tracking ahead, they said.

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