- Early to the annual reporting party, Nick Scali (NCK) doubles profits and bolsters its final dividend for the 2021 financial year
- The furniture retailer increased sales by 42.1 per cent over FY21 to $373 million, with operating costs largely in line with the previous year
- The result was a 100 per cent increase in underlying net profit after tax to $84.2 million for FY21
- However Nick Scali says because of COVID-19 things are too uncertain to provide profit guidance for the first half of the 2022 financial year
- As such, despite the growing sales and profit numbers, Nick Scali shares closed 0.8 per cent lower at $12.31 each.
Early to the annual reporting party, Nick Scali (NCK) has doubled profits and bolstered its final dividend for the 2021 financial year.
The furniture retailer today revealed a 42.1 per cent increase in annual sales revenue, from $262.5 million over the 2020 financial year to $373 million in FY21.
While this was mainly driven by same-store sales growth, which grew 34 per cent, online sales contributed $18.3 million to Nick Scali’s bottom line — an increase of over 500 per cent compared to last financial year.
Managing Director Anthony Scali said the most pleasing part of the company’s FY21 performance was the fact that though sales revenue grew, operational costs remained roughly in line with the year before.
The result was a 100 per cent increase in underlying net profit after tax (NPAT) to $84.2 million for FY21.
Similarly, Nick Scali’s earnings before interest and tax (EBIT) for FY21 increased by 100.5 per cent to $121.9 million.
In light of the financial results, Nick Scali bumped up its final dividend by 10 per cent compared with last year, committing to return to shareholders 25 cents per share for the end of FY21.
This takes the company’s total dividend payout for the financial year to 65 cents per share, representing a payout ratio of 63 per cent.
What’s next?
Looking ahead, Nick Scali said trading during the first month of the 2022 financial year had already been impacted by COVID-19-induced lockdowns in Greater Sydney, Victoria, and South Australia.
However, while written sales orders for July 2021 were down 27 per cent compared to the same time last year, they are still up 24 per cent on July 2019.
Further, with Victoria and South Australia having come out of lockdown towards the end of the month, Nick Scali said these regions traded “exceptionally well” since doors opened back up.
Nick Scali opened three new showrooms over the 2021 financial year, taking its total network of showrooms across Australia and New Zealand to 61.
The company said the new showrooms had traded above expectations and the 2022 financial year presented an opportunity to “realise the benefit of a full year of trading in these locations”.
Nevertheless, with the coronavirus prompting stay-at-home orders and pumping up global shipping costs, Mr Scali said things were still too uncertain for the company to provide a profit guidance for the first half of the 2022 financial year.
Whether it’s because of this uncertainty or for some other reason, the investor reaction to today’s financial report was muted.
Despite the growing sales and profit numbers, NCK shares closed 0.8 per cent lower at $12.31 each. The company has a market cap just shy of $1 billion.