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Nick Scali profit doubled in FY21, online up 510 per cent

The furniture space saw strong growth during the Covid-19 pandemic.

Nick Scali has doubled its profit in the last year, with NPAT reaching $84.2 million, due to a pick up in online sales and relevance in New Zealand.

During FY21 the business was able to cut its expenses as a percentage of sales, while also increasing total revenue by 42 per cent to $373 million and gross margin by 80 basis points.

“The most pleasing aspect of our of FY21 result,” said managing director Anthony Scali, “was the ability of our distribution network across Australia and New Zealand to deliver the materially elevated sales revenue whilst maintaining the same level of costs as FY20.”

Sales in New Zealand also grew 95 per cent during the period, and same store sales grew 40 per cent, while overall online sales grew 510 per cent from $3.3 million in FY20 to $18.3 million.

And, looking at the year ahead, Nick Scali is positive despite the initial setbacks experienced in July 2021 by the lockdowns spread throughout Sydney, Victoria, and South Australia.

Future growth is expected to come from an increasingly accelerated store rollout and online penetration, with online having growth 88 per cent during July compared to the same period of last year.

But, like most businesses trading in the retail space right now, Nick Scali won’t provide profit guidance for the first half of FY22 given the level of uncertainty present in the worsening situation in Sydney.

This is due to the threat posed by the current lockdown, as well as potential future lockdowns, challenges to the global supply chain, as well as the “continuing escalation of global shipping costs”, Nick Scali said.

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