Nick Scali shares surge despite revenue dip

• Nick Scali (ASX:NCK) shares jumped on the release of its FY24 first-half results, exceeding its NPAT guidance of $40-42 million to reach $43 million
• However, revenue and EBITDA both declined compared to the pcp, with revenue down 20.2 per cent and EBITDA down 19 per cent to $89.9 million
• The company maintained its fully franked interim dividend of 35 cents per share
• NCK shares last traded at $14.14

Nick Scali (ASX:NCK) shares jumped on the release of its FY24 first-half results, exceeding its net profit after tax guidance of $40-42 million to reach $43 million.

Group written sales orders increased 1.1 per cent compared to the prior corresponding period (pcp) to $212.7 million.

Group gross profit margin also improved to 65.6 per cent for the half, up 3.6 per cent compared to 1H FY23 and matching the 2H FY23 margin of 65.4 per cent.

Tight cost control and lower logistics costs led to operating expenses being $4.8 million lower than 1H FY23.

However, revenue and EBITDA both declined compared to the pcp, with revenue down 20.2 per cent and EBITDA down 19 per cent to $89.9 million.

The company maintained its fully franked interim dividend of 35 cents per share.

2024 activities

In the first half of 2024, Nick Scali opened a new, larger showroom in Payneham, South Australia, and converted its existing store to an additional clearance store.

Two new plush stores were opened in Helensvale, Queensland and Payneham, while one was closed for network optimisation.

Eleven plush showrooms were updated to the new company concept launched in December 2022, bringing the total to 20.

January 2024 saw sales orders increase by 3.6 per cent to $58.9 million compared to January 2023, with like-for-like (LFL) sales rising by 2.6 per cent.

NCK shares last traded at $14.14.