Kogan profits eroded by Mighty Ape turnaround

Online retailer Kogan has bolstered its sales performance; however, profits fell due to its Mighty Ape turnaround strategy.

Acquired by Kogan in 2020 for $122.4 million, Mighty Ape continues to haemorrhage both revenue and profit.

But Kogan’s own website saw its sales grow by 16.9 per cent to $232.4 million in the first half of the financial year. Kogan.com also grew its gross profit margin by 16.4 per cent, while Mighty Ape’s fell by 28.7 per cent.

Mighty Ape accrued an adjusted EBITDA loss of $3.2 million for the period.

The group’s founder and CEO, Ruslan Kogan, said progress is being made to make the Mighty Ape business viable. 

“We have made good progress at Mighty Ape, undertaking a deliberate operational and inventory reset to position the business to replicate the Kogan.com strategy and consistently deliver market-leading value to our customers in New Zealand,” he added. 

The transformation will see Mighty Ape brought under Kogan’s ‘One Group’ strategy.

He added: “The broader economic environment remains challenging for many households. 

“In times like these, customers gravitate towards trusted brands that consistently deliver value. The Kogan Group is well-positioned in this regard, having built its reputation on providing market-leading prices, supporting customers with unbeatable value that makes everyday shopping more affordable.”

Across the group, Kogan grew its customer base to more than 3 million active customers. However, after-tax profits fell by 20.2 per cent in the half-year period.

An adjusted EBITDA of $27.6 million and adjusted EBIT of $22.5 million, up 18.2 per cent and 22.7 per cent respectively on the year prior, were cause for celebration at Kogan.com.

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