Despite a 20% slide in earnings for the six months to December, furniture retailer Nick Scali (ASX:NCK) has maintained its interim dividend at 35 cents a share.
The company informed the ASX on Tuesday morning that its performance was slightly better than the lowered guidance given at the annual meeting in mid-October.
Net profit of $43 million was slightly ahead of the $40-$42 million range given at the meeting, while the 20% slide in revenue to $226.6 million was also expected.
The company pointed out that revenue in the prior period (the December 2022 half) "benefited from increased deliveries as the elevated June 2022 order bank reduced, with lead times returning to pre-COVID levels over 1H FY23."
CEO Anthony Scali said in Tuesday's release: “Written sales orders were solid for the period, with strong improvement in the second quarter over the prior corresponding period.
"Efficiency in both gross profit margin and operating costs contributed to an NPAT outcome of $43 million, slightly ahead of the guidance provided at the October 2023 AGM.
Group written sales rose 1% to $212.7 million, while like-for-like sales were down 0.4%.
"Q2 FY24 written sales orders were 8.2% higher than Q2 FY23, with both November and December being particularly strong.
"Nick Scali brand online written sales orders were $14.7 million for the half, up 22.5% compared to $12.0 million in 1H FY23, with the majority of growth coming from sales orders completed on the website compared to online orders completed by phone."
"Group gross profit margin of 65.6% for the half improved 3.6% compared to 1H FY23 and is consistent with the 2H FY23 gross profit margin of 65.4%, while operating expenses were $4.8 million lower than 1H FY23, attributable to tight cost control and lower logistic costs,” the company pointed out.
