ASX Earnings Wrap: Nick Scali jumps 8pc after solid year; Star Casino surges 20pc on tax lifeline

It’s earnings season again as the ASX market announcements page becomes increasingly flooded with earnings lodgements.

To save you the trouble of trudging through it all, we’ve wrapped up the highlights from some of the reports that caught our eye.

Nick Scali (ASX:NCK)

Highlights:

Full year revenue of $507.7m, up 15% on pcp
NPAT of $101.1m, up 26.1% on pcp
Final dividend per share of 35c, flat on pcp

These results include twelve months of revenue contribution from Plush-Think Sofas, which was acquired in November 2021.

Nick Scali said that during the year, it benefitted from increased deliveries and the reduction in the ageing of the order bank, as lead times returned to pre Covid levels.

Group gross margin of 63.5% improved 2.5% compared to FY22, primarily due to margin improvement for Plush as acquisition synergies were realised.

During the year, two new Nick Scali stores were opened, in Helensvale, Queensland and Shepparton, Victoria.

One new Plush store in Capalaba, Queensland was added to the store network and in August, a Plush store was opened in Helensvale, Queensland.

The company said its long-term target is for at least 86 Nick Scali stores, and 90-100 Plush stores.

Viva Leisure (ASX:VVA)

Highlights:

Full year revenue increased by 55.4% to $141.2m, driven by strong organic growth
EBITDA margin of 20.7%, up from 6.1% in pcp
Statutory NPAT of $3.4m, a big swing from a loss in FY23 of ($12.1)m

The health and fitness facilities company said FY23 results underscored the robustness of its strategic direction and operational capabilities.

The company was able to increase its margins despite external inflationary pressures.

The expansion in Viva’s locations solidifies its market presence, while increased free cash flow paves the way for continued growth.

“Our investments in technology and strategic growth initiatives, including the imminent launch of Viva Hub and Viva Pay, are set to further boost our performance moving forward,” said CEO, Harry Konstantinou.

Based on these strong results, Viva says FY24 will be better.

“We are confident that we have a solid foundation for continued growth and profitability in FY2024 and beyond,”said Konstantinou.

Baby Bunting (ASX:BBN)

Highlights:

Total FY23 sales of $515.8m, up 1.7% on the pcp
Statutory NPAT of $9.9m, down 49.5% vs pcp
Fully franked dividend of 4.8 cents per share (full year 7.5 cents), down 51.9% vs pcp

The maternity and baby retailer says while its business is less discretionary, customers are still not immune to cost-of-living pressures.

As a result, the company experienced sales decline towards the end of the year as consumer spending slowed.

Online sales have kept growing up however to $103 million, representing 20% of sales, which has risen from around 12% pre-Covid.

The company says it’s now focusing on lowering the cost of doing business, and managing its working capital to align sales against the ongoing economic uncertainty.

“We are holding the right levels of inventory with minimal seasonal and clearance stock,” said Baby Bunting’s Acting CEO, Darin Hoekman.

“We have taken steps in July to reduce overheads and to manage cost inflation in stores and in our supply chain.”

Looking ahead, Baby Bunting expects to open five new stores in FY24, with three new stores in New Zealand and two in Australia.

The Star Entertainment Group (ASX:SGR)

Not earnings related, but Star casino operator surged by over 22% this morning after an update around the proposed poker machine duty tax.

The struggling company said it has been given a lifeline after reaching an in-principle agreement with the NSW Treasurer, Daniel Mookhey, to amend its tax obligations with the State.

Following this agreement, Star expects additional duty payable in FY24 to only be around $10 million, which represents a slash of two-thirds from the original proposal.

Earlier in July, the NSW Treasurer had announced, without prior consultation with The Star, a proposed increase in NSW poker machine tax rates originally intended to take effect from 1 July.

The Star has consistently maintained that this proposed duty increase was not sustainable, and if implemented, would significantly challenge its Sydney business and put thousands of jobs at risk.