Kogan.com (ASX: KGN) has reported some more strong growth in May. Kogan shares are on watch this morning.
What is Kogan.com?
Kogan.com is an online business that was set up by Ruslan Kogan in 2006 in his parent’s garage. Kogan.Com offers a variety of products and services including Kogan Retail, Kogan Marketplace, Kogan Mobile, Kogan Internet, Kogan Insurance and Kogan Travel. The company plans to launch Kogan Super in the near future. Kogan.Com aims to offer consumers price leadership through digital efficiencies.
Kogan.com’s growth in May
The ecommerce business has given another monthly update to tell the market how things are going.
Kogan.com said that it has grown its active customers to 2.07 million as at 31 May 2020. That’s another 126,000 active customers added in one month. Not bad at all.
The company revealed that gross sales have increased by more than 100% in the FY20 fourth quarter to 31 May 2020. Gross profit has grown by more than 130%. ‘Adjusted EBITDA‘ has grown more than 200%, this measure excludes unrealised foreign currency and share-based compensation.
Looking at the financial year to date, adjusted EBITDA to the end of May 2020 has grown more than 50%. The company reported that its average adjusted EBITDA was $7 million per month across April and May.
The company had $58.6 million cash at 31 May 2020 with the debt facility drawn to $26 million, so it’s in a comfortable net cash position.
Are Kogan.com shares a buy?
If the ecommerce business can continue this growth rate for the rest of the year then it could still be one to watch despite the strong run up since March. COVID-19 may have caused a permanent shift to online shopping for some people. I suppose we’ll see over the next nine months what the shopping mentality is.
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Disclosure: At the time of writing, Jaz doesn’t own shares in any of the businesses mentioned.
