Australian online retailer Kogan has written down the associated goodwill of its Mighty Ape gaming and entertainment retail platform in New Zealand after annual impairment testing.
The value of goodwill associated with the Mighty Ape acquisition as at June 30, 2024, was $46.3 million. Alongside gaming and entertainment, which the platform was originally built to sell, Mighty Ape has also begun selling clothing and footwear alongside other household goods since being acquired by Kogan.
The decision to write down the goodwill, according to Kogan, reflects a recognition of the poorer-than-expected trading performance and a longer-than-anticipated recovery from the platform technology challenges following the October 2024 website upgrade.
“This was compounded by the recent challenging retail environment in New Zealand, marked by weak consumer confidence,” the company shared in a statement.
While the company continues to believe that the Mighty Ape business will return to positive trading performance in the second half of FY26, the board considers the write-down of goodwill to be a “prudent measure”, notwithstanding their ongoing confidence in the Mighty Ape business and brand.
The goodwill impairment is a one-off, non-cash measure that will not impact adjusted EBITDA. Further details associated with the impairment will be provided in the release of the FY25 financial report on August 25, 2025.
Despite this impairment, gross sales at both Kogan.com and Mighty Ape were up in the first four months of 2025, at 24.2 per cent and 0.7 per cent respectively. Revenue for both was a bit more mixed, with Kogan up 8.4 per cent to $104.3 million, while Mighty Ape dropped 22 per cent to $32.3 million.
Mighty Ape’s revenue fall in the first four months of 2025 was matched with a 1.8 per cent fall in active customers to 695,000. However, the group’s active customers grew 27.3 per cent to 3.4 million, with Kogan.com active customers growing by 38.0 per cent to 2.7 million.
Group gross profit grew 7.3 per cent to $54.2 million in the four months to April 30, with platform-based sales driving profitability according to Kogan. Meanwhile, gross margin grew 3 percentage points to 39.7 per cent.
In spite of these wins, the group’s adjusted EBITDA declined 37.5 per cent to $6.8 million at a margin of 5 per cent, largely impacted by Mighty Ape, along with the investment in marketing to drive customer growth.
Adjusted EBIT declined 63.7 per cent to $2.5 million at a margin of 1.9 per cent, also largely impacted by Mighty Ape and marketing investment.