Kogan plummets by a third after warning overseas rivals are squeezing margins
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Kogan.com has blamed “now apparent avoidance of GST” by a number of overseas websites selling into Australia for a decrease in its global brands revenue in the September quarter.
Kogan (ASX:KGN) fell by a third to $3.12 in early Monday trade.
The online retailer told investors gross margins had decreased as a result of competition from foreign websites selling into Australia without GST, as well as a general decline in the strength of the Australian dollar.
“New GST laws on low value eCommerce import transactions were introduced on 1 July 2018,” the company said.
“Initially, this saw some competitors exit the market and the Company’s July Revenue grew 33% year-on-year.
“More recently, widespread avoidance of GST has become apparent.
“At this stage, the Company is unable to determine whether the recent widespread avoidance of GST will be temporary.”
Kogan.com posted a 277 per cent rise in full year profit to $14.1 million in FY18, up more than $10 million from last year’s $3.7 million.
The result came as revenue jumped by $122.8 million or 42 per cent to $412.3 million.