WA investment pays off for Nick Scali

nickscaliFurniture retailer, Nick Scali’s, net profit jumped 20 per cent to $17.1 million for the full year ended June 30, up from $14.2 million in the comparable period.

Sales revenue increased 10.1 per cent from $141.4 million to $155.7 million in FY15, fuelled by same store sales growth of 3.4 per cent, the contribution of seven new stores opened in the latter part of FY15, and a consistent investment in marketing.

During the period, the company also launched in Western Australia, opening a distribution centre in the first half and three new stores in the second half at Joondalup, O’Connor and Osborne Park.

“The business performed well and gained market share in an environment where consumers remained cautious with their spending,” said MD, Anthony Scali. “Our ability to hold our margin above 60 per cent and continuing our vigilance in cost control has delivered a record net profit after tax for FY15.”

Despite the decline in the Australian dollar, gross margin held at 60.7 per cent in FY15, compared to 60.4 per cent in the corresponding period.

The new store openings take the groups’s total to 46 – 41 Nick Scali stores and five Sofas2Go stores – and a further two new store sites have been secured and are planned to open in Casula, NSW and Midland, WA. The company says it is also seeking to purchase a property at Nunawading, Victoria.

“We have leveraged the strength and trust in Nick Scali brand and demonstrated the value of diversifying into new geographies by expanding into Western Australia – this now represents a significant opportunity for out business,” Scali said.

Looking forward, the company said it expects broader business conditions to be challenging and increasingly competitive in the 2016 financial year. It noted, a continuing decline in the Australian dollar may bring further challenges to maintain sales and/or margins.

However, the company expects continued sales and profit growth from new store openings and the move into WA.

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