Overview of Kogan.com's half-year report for 2023/24

Kogan.com Ltd (ASX: $KGN) has reported a 9.9% decline in revenue from ordinary activities for the half-year ended 31 December 2023, totaling $248.2 million. The decline is attributed to the strategic transition to Platform-based Sales and the reduction in surplus inventory to realign the business with current trading conditions. However, Kogan Verticals experienced a 25.6% period-on-period growth, Kogan FIRST grew by 109.7%, and Advertising Income grew by 75.7% following the launch of the new Advertising Platform in August 2023. The Group also achieved a statutory profit after tax of $8.7 million in the same period.

Executive commentary on H1 FY24 performance

The profitability of the Group improved during the half-year as a result of the strategic transition to Platform-based Sales, which contributed to 63.0% of total Kogan.com Gross Sales. We also witnessed a recovery in the profitability of the Kogan.com Product Division following the completion of inventory right-sizing at the end of FY23. The Group focused on cost-saving initiatives, reducing total Operating Costs across the Group by 18.4% period-on-period. These initiatives included logistics network consolidation, renegotiation of services contracts, and efficiency gains across IT and hosting capabilities.

Summary of H1 FY24 results and outlook

Kogan.com's H1 FY24 report reflects a strategic shift towards Platform-based Sales, resulting in improved profitability and cost-saving initiatives. The Group ended the half with a strong balance sheet, underpinned by $83.3 million in cash and no external debt. Looking ahead, Kogan.com expects continued growth in Platform-based Sales contribution, profitability improvement within the Kogan.com Product Division, accelerated growth of the newly launched Advertising Platform and Mighty Mobile, continued growth of the Verticals, and further enhancements to Kogan FIRST. The Board has declared an Interim Dividend of 7.5 cents per Ordinary Share, fully franked, with a record date of 15 April 2024 and payment on 31 May 2024.