This is an interesting one. Reported half yearly results today. Hit record revenues and profits (+25%, +38% respectively vs pcp) surpassing the numbers reached during the height of the pandemic. One of the very few ecommerce retailers to do so!

Seems to have got the results by doing upsell promotions; by getting customers to buy more in a single order. As a result, average order size and the items per order have both increased, while the revenue per order decreased. So pushing more volume, for slightly lower prices. But margins have remained high, so the strategy is working.

A pleasing aspect of the result has been the performance of the UK and US divisions up 38% and 256% (tiny base) respectively. UK’s average order size has been moving towards that of Australia’s. While the US’s return customer metric has been improving and is now well above 40%. This will be the true upside for the company should they get those geographies rolling.

I like the candour of the management team. During the conference call, they mentioned that customer acquisition costs (CAC) is not solely about acquiring new customers. There is no way of attributing cost to new or returning customers. Which is the absolute truth - returning customers will still click on Google Ads! I haven’t heard of any ecommerce companies describe it like this.

One area to watch I touched on last time is the inventory levels. They’ve been able to run this down substantially in this half, and is consolidating the range of products. So a tick there.

At $1.40, it’s on a EV/E of 19 and pay around a 4.2% fully franked dividend.