Nick Scali Limited - Preliminary Final Report for FY24
NCK (NCK) Share Update August 2024 Thursday 8th
Nick Scali Limited Reports Decrease in Revenue and Profit for FY24
Nick Scali Limited (ASX: NCK) has released its preliminary final report for the financial year ending 30 June 2024, revealing a significant decrease in both revenue and profit compared to the previous year.
Instant Summary:
- Revenue decreased by 7.8% to $468.2 million.
- Profit after tax decreased by 20.3% to $80.6 million.
- Basic and diluted earnings per share decreased by 20.9% to 98.7 cents.
- Final dividend declared at 33 cents per share, fully franked.
- Acquisition of Anglia Home Furnishings Ltd in May 2024.
Financial Performance
Nick Scali Limited reported a 7.8% decrease in revenue from ordinary activities, amounting to $468.2 million for the year ended 30 June 2024, compared to $507.7 million in the previous year. The profit from ordinary activities after tax attributable to the owners of Nick Scali Limited also saw a significant decrease of 20.3%, falling to $80.6 million from $101.1 million in FY23.
The underlying profit, which excludes one-off acquisition costs related to the purchase of Anglia Home Furnishings Ltd, decreased by 18.8% to $82.1 million. This acquisition, completed on 8 May 2024, is part of Nick Scali's strategy to expand its geographical network.
Earnings Per Share
Basic and diluted earnings per share both decreased by 20.9%, dropping to 98.7 cents from 124.8 cents in the previous year. This decline reflects the overall reduction in profit for the year.
Dividends
Despite the decrease in profit, Nick Scali Limited declared a final dividend of 33 cents per ordinary share, fully franked, with a record date of 26 September 2024, to be paid on 17 October 2024. This follows an interim dividend of 35 cents per share paid on 26 March 2024.
Net Tangible Assets
The company's total net assets increased to $257.8 million from $179.9 million in the previous year. The net tangible assets per ordinary share also saw a significant increase, rising to 117.59 cents from 61.90 cents in FY23. This improvement is partly due to the acquisition of Anglia Home Furnishings Ltd and the associated equity raising.
Acquisition of Anglia Home Furnishings Ltd
On 8 May 2024, Nick Scali Limited acquired 100% of the issued share capital of Anglia Home Furnishings Ltd, including its subsidiary, AHF Internet Limited. This acquisition is expected to enhance the company's presence in the UK market and contribute to its long-term growth strategy.
The decrease in revenue and profit for FY24 reflects broader market challenges and the impact of acquisition costs. While the acquisition of Anglia Home Furnishings Ltd presents growth opportunities, the immediate financial impact has been negative. The declared dividend and increased net tangible assets per share may provide some reassurance to investors, but the overall market reaction is likely to be cautious.
Investor Reaction:
Analysts are likely to have mixed reactions to the report. While the acquisition of Anglia Home Furnishings Ltd is seen as a positive strategic move, the significant decrease in revenue and profit may raise concerns about the company's short-term financial health. The declared dividend and increased net tangible assets per share could mitigate some of these concerns.
Conclusion:
Investors should closely monitor Nick Scali Limited's performance in the coming quarters, particularly the integration of Anglia Home Furnishings Ltd and its impact on the company's financials. The declared dividend and improved net tangible assets per share are positive signs, but the overall decrease in revenue and profit warrants cautious optimism.