Furniture retailer Nick Scali (ASX:NCK)
posted bullish numbers for the 2021 financial year with their net profit after tax, up 100 per cent along with a 42.1 per cent uptick in revenue, compared to the year before beating analyst’s expectations of $79.2 million, as consumers decorate their homes while cooped up inside due to the pandemic.
The furniture retailer posted NPAT of $84.2 million, 7 per cent above the guidance in May due to better than expected sales with a 92.7 per cent spike in EBITDA of $126.6 million, while costs were 30 per cent of sales, down 8.4 per cent the year before.
The news followed the furniture retailer confirming media speculation a few weeks ago that they were in talks to acquire the Plush Sofa from Greenlit Brands under a non-exclusive arrangement.
The pandemic was in full throttle during this time which forced the company to pivot to online sales. This helped them bank $18.3 million from their online sales channel, up $15.3 million on FY20.
The furniture giant did not provide any guidance for the upcoming year due to Covid-19 and the unpredictability around lockdowns. They also said that the current supply chain bottleneck continues to be a worry given that their major supply partners are in Vietnam and Malaysia. Another factor added to all of this are rising freight and shipping costs with inflation being a driving concern. However, the company has been historically notorious for being on the bearish side when it comes to providing earnings guidance.
Moving forward, Nick Scali have their eyes set to open three brick and mortar stores while increasing their online penetration with one new store already opened in New Zealand. They have also started the new financial year with online growth up 88 per cent for the month of July compared to July 2020.
The furniture retailer declared a final dividend of 25 cents a share to be paid to eligible shareholders on 25 October this year.
Managing director, Mr Anthony Scali, said "the most pleasing aspect of our FY 21 result, was the ability of our distribution network across Australia and New Zealand to deliver the materially elevated sales revenue whilst maintaining the same level of costs as FY20”.
Shares in Nick Scali (ASX:NCK)
are trading 0.2 per cent lower at $12.30.