Kogan’s leaders spared some woe

ONLINE marketplace Kogan.com has crashed to an annual loss of $35.5m, its first loss since it listed on the ASX in 2016, hurt by the cost of share options to its millionaire founders, the purchase of a business in New Zealand and diving sales.

Investors had first feared Kogan.com could post its maiden loss when in April the retailer revealed in a trading update that its underlying earnings had dipped into the red by $800,000 in the March quarter.

A string of problems had hit the online retailer, from overcrowded warehouses, to bloated shipping charges and a pull back in demand from shoppers as the Covid-19 pandemic began to wane, leaving the business with stock it had to sell at discounted prices and thinning profit margins.

On top of that a decision in 2020 by the Kogan board to issue $53m worth of in-the-money options to its chief executive and founder Ruslan Kogan (pictured) and chief financial officer David Shafer, has dented reported profits as the non-cash equity based compensation needed to be expensed.

On Tuesday all those ills came crashing down on the Kogan accounts with the company recording a net loss of $35.56m for 2022, against a profit of $3.537m for 2021, while revenue for the period fell 8 per cent to $718.5m.

No dividend was declared, with no final dividend also paid last year.

Kogan’s performance was significantly impacted by ongoing Covid-19-related interruptions and associated fluctuations in demand, experienced across the entire retail industry, resulting in increased logistics and other operating costs, the retailer said.

In the face of these challenges it has made significant progress to achieve a leaner business model in the second half of 2022, by right-sizing inventory and reducing associated operating costs.