The Nick Scali Limited (ASX: NCK) share price is screaming 13.8% higher today after the furniture retailer released its full-year FY23 results.
The company announced a record profit of $101.1 million, up 26.1% compared to FY22.
The retail share is vastly outperforming the S&P/ASX All Ordinaries Index (ASX: XAO), which is down 0.11%.
The Nick Scali share price hit an intraday high of $12.30, its highest level in more than six months. It is now trading at $12.18.
Let's take a look at the full-year results.
Nick Scali share price soars on record profit
Here are the highlights of the report:
- $101.1 million net profit after tax (NPAT), up 26.1% on the prior corresponding period (pcp) of FY22
- $197.1 million earnings before interest, taxes, depreciation, and amortisation (EBITDA), up 20.8% pcp
- $507.7 million revenue, up 15.1% pcp
- Gross margin of 63.5%, up 2.5% pcp
- Cash and bank deposits at 30 June 2023 of $89.3 million, up from $74.6 million in June 2022
- Final dividend of 35 cents per share, same as FY22 and payable on 18 October
- Total dividend for FY23 of 75 cents fully franked, up 7.1% from 70 cents in FY22.
Nick Scali said revenue improved due to increased deliveries, as lead times returned to pre-COVID levels.
Revenue in FY23 was also boosted by a full year's contribution from Plush — Think Sofas, which Nick Scali bought in November 2021 for $103 million in its first major acquisition.
Synergies led to reduced freight and product sourcing costs for the group.
Nick Scali opened two new Nick Scali stores — in Helensvale, Queensland and Shepparton, Victoria — and two Plush stores — in Capalaba, Queensland and Helensvale. The company closed three Plush stores "as the Group continues to optimise the acquired Plush store network for floor size and quality locations".
What else happened in FY23?
It looks like rising inflation and interest rates are beginning to affect demand, with written orders falling in the second half of FY23.
Like-for-like store sales in 2H FY23 fell 16.2% compared to 2H FY22. The company said trading was "very
volatile" over the second half.
What did Nick Scali management say?
Managing director Anthony Scali said:
Revenue in the year has been underpinned by the efforts of our Logistics team who were able to manage the peaks of product inflows enabling our lead times to customers to reduce as shipping delays eased.
In FY23, we completed the full integration of the Plush operations and processes with the sales order process the last key process to be integrated in December 2022.
Trading during the year has been variable and challenging as consumer sentiment deteriorated in line with interest rate increases.
What's next for Nick Scali?
At June 2023, the store network comprised 64 Nick Scali stores and 43 Plush stores. The company expects to open three new Plush stores and one new Nick Scali store in 1H FY24.
The long-term target is at least 86 Nick Scali stores and 90-100 Plush stores in areas with a growing population, and also areas where either one of their stores is already operating.
Nick Scali share price snapshot
The Nick Scali share price has lifted 20.5% over the past 12 months while the All Ords has risen 3.2%.
Based on today's share price and the full-year dividend for FY23, Nick Scali offers a yield of 6.15%.
Nick Scali is trading on a price-to-earnings (P/E) ratio of 8.49, according to the ASX website.
