Australian furniture group Nick Scali has reported a growth in half year sales while also sharing its latest progress in the UK market.
According to its half year results for the period ended 31 December 2024, total sales rose 10.8% to $251.1m from $226.6m against the same period the previous year.
Sales in its native Australian market were down 1.8% to $222.5m from $226.6m, while UK sales resulted at $28.6m.
Group profit was down 22.8% to $33.2m from $43m, while UK Underlying net loss after tax was $2.8m, lower than the $3.3m – 3.8m loss guidance it previously forecast in October 2024.
“UK written sales orders of $19.4m were significantly impacted during the period particularly in the second quarter FY25, from the disruption to the business caused by stores closed for refurbishment and the Fabb product range being cleared from showrooms and warehouse inventory,” the group said on the UK market.
“UK gross margin was 45.1% versus 41.0% pre-acquisition. UK Underlying 1H FY25 operating expenses were $10.2m. Post acquisition restructuring has resulted in a realised run rate savings circa $2m per annum, partially reflected in the period.”
During the first half, Nick Scali refurbished four stores in Leicester, Coventry, Farnborough and Thurrock, which were reopened on Boxing Day displaying the entire Nick Scali product range.
“The expected gross profit margin on the Nick Scali product when delivered is 57-59% net of consumer finance costs, compared to the Fabb gross margin of 41% at acquisition,” the group added.
“The programme of store refurbishments and rebranding to Nick Scali will continue in the second half of FY25 and will result in further disruption to written sales orders as stores are closed and refurbished. The remaining Fabb stores are receiving the Nick Scali product as they sell off the Fabb product.”
Furthermore, Nick Scali (UK) online launched mid-January 2025, along with UK radio and TV marketing also commencing during January.
Anthony Scali, Nick Scali Limited Managing Director, said: “Re-branded Nick Scali UK stores were the top three performing UK stores in January 2025 for written sales orders, only one of which was in the top five under Fabb.
“Our aim is to complete the refurbishment and re-branding of a further eight stores by 30th June 2025. The top selling Nick Scali sofa in ANZ is now the top selling sofa in our UK Stores. This supports our belief that the Nick Scali product range will appeal to UK customers.”
Looking ahead, Nick Scali expects further disruption compared to the first half and increase the operating losses in the second half compared to the first half in relation to the ongoing refurbishment programme.
