Kogan.com Group says its flagship website returned to profitability in the second half following earlier steps to control costs and right-size inventory levels after investing too much in growth during the pandemic.
The online retailer said on Wednesday that Kogan.com had $8.5 million in adjusted earnings before interest, tax, depreciation and amortisation in the second half, with Mighty Ape contributing $2.7m, for a total of $11.2m in EBITDA earnings.
A year ago, Kogan.com lost $3.6m, although Mighty Ape's $5.2m contribution saved the company from a loss.
Overall Kogan.com ended the financial year with $65.4 million in cash, up from a net cash balance of $31.2m a year ago.
The company's gross sales declined 22.5 per cent to $373.7m, which Kogan blamed on soft market conditions caused by inflationary pressures and interest rate rises.
Kogan reduced inventories to $68.2m, from $159.9m a year ago, while growing Kogan First subscribers to 401,000, from 372,000.
"It has been an important year for Kogan.com as we drove efficiency through our business," founder and chief executive Ruslan Kogan said.
"We know millions of customers are struggling with cost of living pressures, and we’ve been able to recalibrate our business to better support them in these times."
RBC Capital Markets analyst Wei-Weng Chen said the result beat pessimistic expectations despite lower-than-expected gross sales, with strong EBITDA performance beating consensus expectations.
The performance was driven by continued optimisation of KGN's cost base, as the retailer spent less than expected on operating expenses, Mr Chen wrote.
At 3.07pm AEST, KGN shares were up 6.0 per cent to a one-year high of $6.17.
