ASX 200 rises, Kogan sinks, EML soars

The S&P/ASX 200 Index (ASX:XJO) went up today. The Kogan.com Ltd (ASX:KGN) share price sank, but EML payments Ltd (ASX:EML) soared.

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The S&P/ASX 200 Index (ASX: XJO) went up by 0.15% to 7,030 points today.

Here are some of the highlights from the ASX:

Image source: Getty Images

Kogan.com Ltd (ASX: KGN)

The Kogan share price was the worst performer in the ASX 200 today, falling by over 13%.

The e-commerce ASX share said that underlying operating performance is expected to be challenged in the near-term, leading to adjusted earnings before interest, tax, depreciation and amortisation (EBITDA) to be lower than the current range of analyst forecasts.

Kogan's projection for FY21 adjusted EBITDA is in the range of $58 million to $63 million.

Having doubled in size in the first half of FY21, it decided to significantly expand its inventory holding to provide the products and delivery experience that customers expect. The company also increased its logistics footprint to 31 facilities. This rapid expansion has resulted in a number of near-term supply chain inefficiencies and inventory planning challenges, all of which are being addressed.

The higher inventory levels has meant higher warehousing costs. It's spending more on marketing and increased discounting to sell the excess inventory.

There was one positive that Kogan revealed. The demurrage issue that the company was experiencing has been resolved. However, this has led to significant costs over the last five months. But it doesn't expect any material demurrage issues to arise in the future.

Kogan said that the longer term fundamentals for the business remain very attractive given the company's position in the Australian and New Zealand online retail markets, and with online retail sales currently only accounting for a small percentage of total retail sales in Australia and New Zealand.

EML Payments Ltd (ASX: EML)

The EML share price rebounded today. It went up more than 15% today, adding to the recovery over the last couple of days.

However, it is still down 35% from the share price level before it announced the regulatory issues that it is facing from the Central Bank of Ireland (CBI).

The regulator has concerns relating to EML's subsidiary in Ireland that is responsible for around 27% of the company's global consolidated revenue that operate under Irish authorisation.

Those concerns relate to anti-money laundering and counter terrorism financing, risk and control frameworks and governance.

EML said it welcomes the opportunity to engage more closely with the CBI in relation to the matters raised and the business model more generally. EML is committed to co-operating with the CBI and is taking steps to address concerns raised.

Airtasker Ltd (ASX: ART)

Airtasker announced today that it was acquiring US local services marketplace Zaarly for $3.4 million and launching a $20.7 million capital raising to accelerate its international expansion.

The Zaarly acquisition provides Airtasker with more than 597,000 registered users (customers) and more than 900 verified service providers to jump start its US expansion.

Airtasker said that Zaarly's highly experienced team of marketplace product, engineering and operations executives will be led by CEO Bo Fishback and will joint Airtasker to lead the US market expansion.

The capital raising of 20.7 million shares will be done at an issue price of $1 per share for institutional, professional and sophisticated investors. Some of the money will be used to expand into key city markets in the US and UK.

Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. owns shares of and recommends EML Payments. The Motley Fool Australia's parent company Motley Fool Holdings Inc. owns shares of Kogan.com ltd. The Motley Fool Australia has recommended EML Payments and Kogan.com ltd. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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