By - Sonal Goyal
Highlights:
- Nick Scali expects to report net profit after tax of AU$56 to AU$59 million during the first half of the financial year 2023.
- The sales revenue for the fours the months ending on 31 October surged by 74% over the prior corresponding period.
- In FY23, the company intends to open at least two Nick Scali and four Plush stores.
The share price of Nick Scali Limited (ASX:NCK) jumped on Thursday (24 November 2022) following a trading update shared via an ASX filing. The furniture retailer shared that it expects its net profit after tax to increase by 57% to 66% in the first half of the financial year 2023 (1HFY23) over the previous year. The guidance is based on the current delivery levels, informed Anthony Scali, managing director of the company.
Meanwhile, the share price of Nick Scali increased by 11.46% to trade at AU$10.41 apiece at 12:54 PM AEDT. With this, the share price has surged by 15.81% in the past six months. In the past one year, it has dropped by 31.67%, and on a year-to-date basis, it has declined by 32.86%.
The company reported sales revenue of AU$194 million during the four months ending on 31 October 2022, reflecting an increase of 74% over the prior corresponding period.
The group margin improved to 61.3%, compared to 59.5% in the second half of FY22.
Group written sales orders increased by 55% over the previous year to AU$148 million. Witten orders were 21.7% higher than the first four months of the previous year.
Considering the recent trading, Nick Scali said that it expects net profit after tax of AU$56 to AU$59 million during the first half of FY23. As reported, net profit after tax will be dependent upon actual deliveries recorded before December end.
In 2022, the company reported a sales revenue of AU$441 million with an underlying profit of AU$80.2 million. These numbers were achieved despite the impact of the Covid-19 driven pandemic.
According to today's release, more than 55% of the store network was not operating during the first three months because of the government mandate. Overseas lockdown measures, especially in Vietnam, lead to production delays for manufacturers during the first half of the year.
Driven by store closure, the written sales order decreased by 6% over the previous year. The underlying NPAT fell by 4.9%.
During the year, the company completed the acquisition of a sofa retailer, 'Push-Think Sofas' for consideration of AU$103 million in November 2021. The acquisition resulted in the expansion of the store network by 46 stores.
In FY23, the company intends to open at least two Nick Scali and four Plush stores.
The company ended the year with a cash balance of AU$74.6 million.