Shares in furniture retailer Nick Scali Ltd (ASX: NCK) have hit a new record high of more than $25 apiece after the company announced it was trading strongly and would comfortably beat last year's first-half profit result.
Speaking at the company's annual general meeting (AGM) on Wednesday, Managing Director Anthony Scali stated that in the Australian and New Zealand markets, same-store sales orders increased by 10.7% in the first quarter, and total sales orders rose by 11.6% compared to the same period last year.
He added:
Sales Revenue in the first quarter increased 6% and we expect sales revenue for the first half FY26 to be 7-9% more than the previous year. As a result of the anticipated revenue growth in Australia and New Zealand, the Australia and New Zealand statutory net profit after tax for the first half FY26 will be in the range of $39-40 million, compared to $34 million in the prior corresponding period.
Mr Scali said the company expected to make a loss of $5 million to $6 million in the UK across the first half, which would bring the overall net profit for the first half to $33 million to $35 million, compared with $30 million for the first half of FY25.
Shares in the furniture retailer reacted strongly to the update, changing hands for $25.11 in morning trade on Wednesday, up 11.6%.
Image source: Getty Images
UK division improving
Mr Scali said while the UK division had not performed profitably, "as more store refurbishments are completed, written sales orders have begun to improve''.
He added:
Nick Scali branded stores for the August and September period were up 10% on the same period when the stores traded as Fabb. During August and September there were 13 and 14 stores trading as Nick Scali respectively, with one to two stores closed for refurbishment. The UK gross margin in the first quarter was 58.3%, which compares to 41% on acquisition of the business and 47.1% for FY25. We can now see a clear improvement in written sales which will transcend to better revenue results towards the end of the half.
Chair John Ingram retired at the conclusion of Wednesday's AGM, with Anthony Scali taking on the role as Executive Chair and Managing Director. There will be no changes to Mr Scali's remuneration as a result of the change.
Nick Scali, which was valued at $1.92 billion at the close of trade on Tuesday, was added to the S&P/ASX 200 Index (ASX: XJO) at its June rebalance.
