Nick Scali aims for growth

3 March 2010

Furniture retailer Nick Scali has its eye on expansion, having achieved robust operating cash flows in the six months to December 2009. In his half year results statement, managing director Anthony Scali confirmed the company planned to leverage current opportunities for strategic investments to secure future growth.

"The company hopes to step up the current rate of store openings as suitable sites become available to accelerate the growth of the business and take advantage of the scale benefits inherent in our retail model." Scali confirmed.

The announcement follows store openings in the first half including one at Melbourne's South Wharf, with two more expected to open in the second half, one each in Sydney and Brisbane.

Nick Scali reported a record net profit before tax of $8.9 million (after tax $6.3 million) for the half year ended December 31 2009. Net profit before tax for the half was 146 per cent above the previous corresponding period, which had been impacted by the effect of the economic crises on consumer sentiment.

Scali said he was "extremely pleased" with the result, adding it confirmed the company's retail model could deliver strong returns as market conditions improved.

In the first half sales revenue increased 22 per cent to $48.7 million as a result of the opening of three new stores and a 14.4 per cent growth in comparable store revenue, driven by positive consumer sentiment and a more buoyant housing sector.

Going forward, the company was positioned well to benefit further if consumer sentiment remained positive, while its financial strength would allow it to weather any potential market softening and take advantage of strategic opportunities as they arose.

While uncertainty remained as to whether the recovery of the past six months would be sustained for the rest of the year, the directors' current expectation was that the full year after tax profit would be around $10 million.

 

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