Nick Scali reports FY24 achievements

Nick Scali (ASX:NCK), a leading furniture retailer, reported a strong financial performance for FY24. The company recorded underlying profits of $83.5 million from its operations in Australia and New Zealand. In May 2024, Nick Scali expanded into the UK market by acquiring Anglia Home Furnishings Limited, trading as Fabb Furniture. This strategic move was supported by a capital raise of $54.8 million, leading to a 51% rise in the company's share price over the financial year.

Nick Scali's strategic growth and future outlook

Nick Scali Limited has demonstrated robust performance in FY24, highlighted by its strategic expansion into the UK market through the acquisition of Fabb Furniture. This move aligns with the company's goal to replicate its successful business model internationally and grow its store network. Despite a decline in sales revenue, the company maintained strong profitability with a statutory net profit after tax of $80.6 million. The total dividend for the year was 68 cents per share, reflecting Nick Scali's commitment to shareholder value. As of June 2024, the company reported 128 showrooms, with further expansion and optimization planned. Looking forward, Nick Scali expects the first half of FY25 to yield delivered sales revenue between $217 million and $222 million in Australia and New Zealand, with initial UK losses anticipated during integration. However, improved margins are expected as the Nick Scali product range is introduced. The company remains cautious about rising freight costs but is focused on expanding its store network and enhancing profitability.

Executive insights on Nick Scali's FY24 performance

Managing Director Anthony Scali highlighted the company's strong performance, with revenue and gross profit stabilizing post-COVID. Although overall sales revenue decreased by 7.8% to $468.2 million, the gross margin in Australia and New Zealand rose by 250 basis points to 66.0%, driven by stable freight costs and efficient purchasing. Despite facing increased operating expenses due to inflation and network growth, the company successfully integrated its UK acquisition.