The continuing solid pace of home construction (as shown by the November building approvals data from the Australian Bureau of Statistics) helps explain why the likes of Beacon Lighting and now furniture retailer, Nick Scali, are still doing well in the wake of the easing of the tight pandemic-linked lockdowns.
Beacon upgraded its first half earnings forecast before Christmas to a record level, with a solid rise in online sales, now for yet another time, Nick Scali says its December 31 performance will be better than previously thought. (its the 4th upgrade since the pandemic started in March).
Nick Scali (ASX: NCK) says that for the period to December 31, it expects unaudited net profit to come in at $40.5 million.
This represents nearly a doubling of underlying profit from the same time last year (December 31, 2019 half year).
The company credited the result to better-than-expected container availability which led to increased delivery volumes throughout November and December from its offshore factories in countries in China.
Total written sales also rose, with the second quarter delivering a 58% lift on the prior comparable period to a record level.
This was due to the reopening of the company’s Melbourne metropolitan stores and a successful Black November campaign. In light of this, Nick Scali said that total written sales orders surpassed delivered sales by about $20 million, meaning the June half will be boosted by deliveries of that $20 million of furniture.
The company says it expects the higher revenue and profit growth to flow into the June half year (but as always this is reliant on no disruptions affecting its store network or supply chain).
NCK expects strong contributions to the 2021 result from new store openings at Wairau Park in Auckland, and Bennetts Green inNSW.
Nick Scali shares eased 2.8% to $10.84 on Thursday after rising sharply off the back of the upgrade on Tuesday
