$8.7 million profit for Nick Scali

Furniture retailer Nick Scali has reported a 6.9% increase in annual net profit for 2006-07 to $8.7 million, which is below its forecast of $9 million. “While we fell marginally short of our profit target, we are satisfied with the net profit in this period of managing growth,” said MD Anthony Scali.

He said trading so far in fiscal 2008 is positive, with new stores performing to expectations. Sales levels for the first three months of the financial year on same-store basis were positive compared with the previous year.

“New stores have performed up to expectations,” he said at the retailer’s annual general meeting in Sydney.

Nick Scali faced difficult trading conditions throughout last year, particularly in NSW, where it derives half of its business.

Scali noted that market conditions continued to be difficult in metropolitan Sydney throughout last year, but was upbeat about the future. “We are now happy with our store footprint in Sydney and believe we are well placed to capitalise on a recovery in the market,” he added.

In 2006-07, three new Nick Scali stores were opened in Nunawading and Essendon in Melbourne and Belrose in Sydney. “All three are performing well and we expect Essendon and Nunawading in particular to be amongst our best stores in the future,” Scali said.

“Since June 30, we have opened a new store in Bundall on the Gold Coast and will open Marion in Adelaide in November.” He also expects to open three stores this fiscal year in Perth.

“Extending our network into Western Australia will be an important step in establishing Nick Scali as a national retailer and should enable the company to capitalise on the ongoing strong economic growth in the state,” he said.

Inside Retail