Nick Scali (NCK) H1 2025 earnings summary

Executive summary

• Group revenue for 1H FY25 was $251.1m, up 10.8%, driven by full-period UK inclusion.

• Statutory profit after tax was $30.0m, down 30.2% due to UK losses and one-off ANZ costs.

• Underlying profit after tax was $33.3m, exceeding guidance, with ANZ contributing $36.0m and UK a $2.8m loss.

• Interim dividend of 30 cents per share, fully franked, was declared, payable 26 March 2025.

• UK operations reported improved gross margins but continued short-term losses due to restructuring and integration.

Financial highlights

• Group EBIT was $50.7m and EBITDA $77.6m for 1H FY25, both down year-over-year.

• Group gross margin declined to 62.3% (from 65.6%) due to higher freight rates and UK mix.

• ANZ gross margin was 64.4%, down 1.6% year-over-year; UK gross margin improved to 45.1% from 41.0% pre-acquisition.

• Group written sales orders rose 7.0% to $227.4m; ANZ online written sales orders grew 17.0% to $18.6m.

• Basic EPS dropped to 35.1 cents (from 53.1 cents) year-over-year.

Outlook and guidance

• ANZ trading remains volatile; written sales orders fell 8.5% in January 2025 but rebounded 5% in early February.

• UK expects further disruption and increased short-term losses in 2H FY25 as eight more stores are refurbished and rebranded.

• One new Plush store to open in Melton, Victoria in 2H FY25; some store openings delayed to FY26.

• UK to complete refurbishment and rebranding of 8 more stores by 30 June 2025.