Kogan’s June profit soars to over $17m

Kogan has increased fourth-quarter profit by 115 per cent and its founder has responded to a court ruling that found the online retailer misled customers during a sales promotion.

Kogan’s profit rise was a leap on the same period last year, largely helped by shoppers’ preference to buy online and stay away from shops during the COVID-19 pandemic.

While a fourth-quarter profit was not provided, management said profit for June was more than $17 million. This was better than April and May profit, it said.

Sales for June amounted to more than $94 million and adjusted earnings before interest, tax, depreciation and amortisation was more than $7.9 million.

However, the business may still pay a hefty penalty after the Federal Court last week found the prices of more than 600 products were raised before a sale in June 2018.

The court agreed with Australian Competition and Consumer Commission claims Kogan had increased prices by more than 10 per cent before offering some customers a 10 per cent reduction.

Founder Ruslan Kogan seemed to refer to the ruling without mentioning it in his trading update message.

“The thing I love about running an e-commerce company is that we operate in one of the most transparent and competitive industries,” he said.

Mr Kogan said the website’s prices were advertised every second of the day and everyone could browse and compare them.

“Every decision we make in the business assumes that our customers are smart shoppers who have done lots of research – in other words, educated, informed consumers.”

The management team is due to receive bonuses of $1.1 million for the results.

Kogan shares were up 5.54 per cent to $18.30 at 1010 AEST on the ASX.

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