Nick Scali profits to double on bumper sales period

Nick Scali profits to double on bumper sales period

The reopening of stores in Melbourne and the Black Friday discount period have seen Nick Scali's (ASX: NCK) sales rise and underlying net profit after tax double in the first half of FY21.

According to the company's latest trading update, unaudited NPAT for 1H21 is expected to be $40.5 million, up approximately 100 per cent on the prior corresponding period.

The company attributes the doubling of profits to better than previously anticipated container availability during November and December, leading to increased delivery volumes.

Further total written sales orders for the second quarter of FY21 grew by 58 per cent, driven by the reopening of Melbourne metropolitan stores as well as a successful Black November campaign across both online and in-store channels.

Total sales for the first half grew by $20 million due to "exceptional" growth in the second quarter.

"Consequently, the sales order book was at an all-time high at 31 December 2020 and this is expected to translate to material revenue and profit growth in the second half of the financial year, subject to there being no further disruption to the store network or supply chain," says Nick Scali.

The retailer says new stores in Auckland and Bennetts Green in NSW have both performed strongly and are expected to contribute to profit in 2H21.

"Despite the entire store network being reopened at the end of October, sales made through digital channels continued to grow during Q2 FY21," says Nick Scali.

Nick Scali achieved a profit of $41.2 million in FY20 despite COVID-19 impacts to trading, marking the eighth straight year of the company being profitable.

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