Nick Scali bucks the retail trend with record $41m profit; shares jump 14pc
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Furniture retailer Nick Scali has given ‘retail’ shareholders a reason to smile, posting a record $41 million profit in the same week when rival furniture retailer John Cootes closed down.
Nick Scali’s profit was a 10.1 per cent improvement on the previous year’s $37.2 million, and was coupled with a 7.7 per cent bump in revenue to $250.8 million.
Nick Scali (ASX:NCK) put the positive results down to increased sales from the four stores it opened during FY17 and six new stores opened during FY18.
Its shares put on 14 per cent to an intraday high of $6.83 — valuing the company at about $490 million. They closed Thursday at $6.78.
At the start of this week Elanor Investors Group (ASX:ENN) announced it was shutting down the old-school retail chain John Cootes Furniture after more than 35 years in business.
A month earlier, famed vacuum shop Godfreys left the ASX to go private after losing 90 per cent of its value in three years.
On the other hand, online furniture retailer Temple & Webster has been one of the best performing small caps over the past year.
Nick Scali was then named as one of the retail chains that might benefit from increased spending on household goods.
The result “demonstrated that the continued store rollout provides significant leverage enabling us to improve our operating margins”, said Anthony Scali, the company’s MD.
Mr Scali painted a positive outlook for the coming financial year, with six new stores to open, including a second New Zealand outlet.