Nick Scali’s profits double in COVID boom, triggering dividend bonanza

Furniture retailer Nick Scali has unveiled a near doubling of its profits in the December half, letting it boost divdend payouts to shareholders, but warned its growth remains constrained by COVID-related supply issues.

The ASX-listed retailer, known for its range of leather lounges, said on Thursday morning its sales for the six months to the end of December had risen 24.4 per cent to $171.1 million. Underlying net profit surged 99.5 per cent to $40.5 million.

COVID-boom: Nick Scali managing director Anthony Scali has reported a bumper profit.
COVID-boom: Nick Scali managing director Anthony Scali has reported a bumper profit.Credit:Ben Rushton

But the company’s volume of written orders – sales which are yet to be fulfilled – grew at 52 per cent, twice the rate of its actual revenue growth. This was primarily due to “the extended lead times caused by delays in raw materials to our suppliers and shipping issues which continue to be challenging”, the company said.

As stores were closed during the pandemic lockdowns, Nick Scali’s online sales also increased, contributing $8.8 million in sales and $3.5 million in earnings.


Nick Scali has seen significant benefits from the COVID-19 pandemic thanks to a higher demand for furniture as Australians spend more time at home than ever before.

Its profit surge means the company will pay shareholders a 40 cent per share interim dividend, up 60 per cent from the prior half. Around $4.4 million, or 13 per cent, of the payout will go to managing director and majority shareholder Anthony Scali.

The dividend bonanza could be controversial given the company has been a notable JobKeeper recipient, pocketing $3.9 million in COVID support for the 2020 financial year and receiving a further $3.8 million in COVID support for the December half as it claimed JobKeeper payments and some New Zealand subsidies up until September. Nick Scali’s total operating expenses fell 10.8 per cent to $49.9 million in the latest half.

A number of other retailers have faced heavy criticism for paying sizeable dividends or executive bonuses while claiming JobKeeper, including footwear seller Accent Group and billionaire rag trader Solomon Lew’s Premier Investments. At the same time, some companies have chosen to give the wage subsidies back after recording better-than-expected earnings: Car seller Toyota returned $18 million, while Super Retail Group returned $1.7 million and Coca Cola Amatil sent back $6.7 million.

“The first half of financial year 2021 had many challenges to navigate including government-mandated store closures, supply chain issues and significant delays experienced with global shipping providers,” Mr Scali said.

“Despite these events, the team was able to capitalise on shifting consumer spending patterns and deliver a record result for the company”.

The booming sales have continued to flow into the second half. Sales orders hit a record in January, growing 47 per cent for the month, however Nick Scali warned sales across the remainder of the half could continue to be affected by supply chain issues.

“These supply chain delays make it difficult to accurately predict sales revenue growth for the second half,” it said.

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