Kogan floats on ASX, shares fall on first day of trading

Kogan's life as a public company is off to a rocky start, with shares falling 30 cents on its first day of trading.

Shares fell 16 percent from $1.80 to $1.50 by the end of trading Thursday, while the broader market was up by 0.4 percent for the day.

The online retailer listed on the Australian Securities Exchange today after raising $50 million through an initial public offering. Kogan offered 28.4 million shares at $1.80 each, giving it a market capitalisation of $168 million.

Kogan's prospectus states that the $50 million will be used to invest in growth strategy, marketing and inventory, while $4 million will be used to pay off debts.

Chief executive Ruslan Kogan remains the majority shareholder with 50.5 percent, while chief operating officer David Shafer retains 19.1 percent. Both men will be paid a share of $15 million as a result of the IPO.

The company's telecommunications business Kogan Mobile, which it reopened last year, expects to grow to $1.7 million in revenue by financial year 2017.

In March, Kogan bought the Dick Smith online store for $2.6 million. The company stated that it expects the reopened Dick Smith online store to generate "significant revenue" but didn't give an estimate.

Its other newly opened business, Kogan Travel, is expected to grow to $5.4 million next year.

Kogan will begin normal trading on the ASX on Monday 11 July using the ticker KGN.

Half-year results

Kogan, now obliged as a public company, released its results for the half year ending 31 December. Revenue was down by $6 million to $102.6 million for the six-month period. Profit was also down from $2.4 million to $1.6 million.

The company has already forecast its results for the 2017 financial year, ending 30 June next year. Kogan expects revenue of $241.2 million, which would be an increase of $41.1 million from the previous year, or close to 20 percent growth.

Earnings are expected to be $6.9 million in financial year 2017 - an increase of $4 million - and net profit up from $400,000 to $2.5 million.

Forecasts did not take the impact of the Dick Smith acquisition into consideration.