Nick Scali : H1 FY22 Appendix 4D & Half Yearly Report

Nick Scali Limited

Appendix 4D

Half-Year Report

	1. Company details
	Name of entity:	Nick Scali Limited
only	82 000 403 896
	ABN:
	Reporting period:	For the half-year ended 31 December 2021
	Previous period:	For the half-year ended 31 December 2020
	2. Results for announcement to the market
use						$'000
	up	5.4%	to	180,323
	R venues from ordinary activities
	Profit from ordinary activities after tax attributable to the owners of
	Nick Scali Limited		down	17.4%	to	33,550
	Profit for the half-year attributable to the owners of Nick Scali Limited	down	17.4%	to	33,550
	Dividends
personalInterest expense							Franked
			Amount per		amount per
				3,941	3,281
					security		security
						Cents		Percentage
	Fi al dividend for the year ended 30 June 2021 paid on 25 October 2021				25.0	100.0
	On 3 February 2022 the directors declared a fully franked interim dividend of 35.0 cents per ordinary share with a record
	date of 7 March 2022 to be paid on 28 March 2022.
	Comments
	The profit for the consolidated entity after providing for income tax	amounted to	$33,550,000 (31 December 2020:
$40,619,000).
					31 Dec 2021		31 Dec 2020
						$'000	$'000
	Profit after income tax expense					33,550	40,619
	Interest income					(68)	(244)
	Income tax expense					14,795	17,172
For
				52,218	60,828
	Ea nings Before Interest and Tax (EBIT)
	Depreciation and amortisation expense				17,905		15,454
	Earnings Before Interest, Tax, Depreciation and Amortisation (EBITDA)				70,123	76,282
	3. Net tangible assets
					Reporting		Previous
					period		period
						Cents		Cents
	Net tangible assets per ordinary security				4.53	118.36

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Nick Scali Limited

Appendix 4E

Preliminary final report

4. Entities over which control has been gained or lost during the period

onlyDuring the period, Nick Scali Limited acquired Plush-Think Sofas Pty Ltd for a total consideration of $108,383,000. The acquisition was funded through a combination of new debt facilities and existing cash on hand.

For usepersonal

onlyNick Scali Limited

ABN 82 000 403 896

useHalf-Year Report - 31 December 2021 personalFor

Nick Scali Limited

Contents

31 December 2021

Contents

Directors Report

Auditor's Independence Declaration onlyConsolidated statement of comprehensive income

Consolidated statement of financial position Consolidated statement of changes in equity Co solidated statement of cash flows Notes to the financial statements Directors' declaration

Independent auditor's report to the members of Nick Scali Limited

For usepersonal

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Nick Scali Limited

Directors Report

31 December 2021

The Company's directors present their report, together with the financial statements, on the consolidated entity (referred to hereafter as the 'Group') consisting of Nick Scali Limited (referred to hereafter as the 'Company' or 'parent entity') and the entities it controlled at the end of, or during, the half-year ended 31 December 2021.

onlyDirectors

The names and details of the Company's directors (referred to hereafter as the 'Board') in office at any time during the period until the date of this report are as follows. Directors were in office for this entire period unless otherwise stated.

John Ingram

Stephen Goddard

William Koeck

Car le Molyneux

Anthony Scali

usePrincipal activities

The principal activities of the Group during the half-year were the sourcing and retailing of household furniture and related accessories. No significant change in the nature of these activities occurred during the half-year.

Dividends

D ring the interim period a final franked dividend for the year ended 30 June 2021 of 25.0 cents per fully paid ordinary share was paid. Since the end of the interim period the directors have declared a fully franked interim dividend for the year ending 30 June 2022 of 35.0 cents per fully paid ordinary share. The interim dividend will be paid out of retained profits at 31 December 2021, on 28 March 2022.

Operating and financial review

Acquisition of Plush-Think Sofas Pty Ltd

On 1 November 2021 the Company acquired Plush-Think Sofas Pty Ltd ('Plush') from Greenlit Brands Household Goods Pty Ltd for a consideration of $108,383,000. The acquisition group was funded through a combination of new debt facilities and existing cash reserves. The Group expects the acquisition to enable it to reach a wider customer demographic.

Group operating results
	31 Dec 2021	31 Dec 2020	Change
	$'000	$'000	%
R venue	180,323	171,081	+5.4%
N t profit after tax	33,550	40,619	-17.4%
Earnings per share ('EPS' cents)	41.4	50.1	-17.4%
Dividend per share (cents)	35.0	40.0	-12.5%
Net cash flow	(46,291)	24,611	-288.1%
personal

Despite revenue growing by 5.4%, to $180,323,000, net profit after tax of $33,550,000 for the half-year ended 31 December For2021 was down 17.4% on the prior comparative period.

The decline in profitability was due to (a) a reduction of 80 basis points in the gross margin from 64.0% to 63.2%; (b) one- ff transaction costs of $2,914,000 incurred in relation to the acquisition of Plush; (c) the timing of the receipt of the

Jobkeeper wage subsidy in the prior comparative period; and (d) the relatively higher cost base of the Plush business. Operating expenses within the continuing business were tightly managed across all areas of the business, with no material increase in underlying operating costs.

Although operating cashflows remained positive during the period, the Group had a net cash outflow during the period due to the acquisition of Plush.

Showroom network

During the half-year, the Group opened a new Nick Scali Furniture showroom in Hastings, New Zealand, whilst the acquisition of Plush-Think Sofas Pty Limited added a further 45 showrooms bringing the combined showroom network to 108 (103 in Australia and 5 in New Zealand).

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