Furniture retailer caves to public pressure after managing director Anthony Scali received $4.4 million in increased dividends.
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Last week, the company reported record numbers across the board in its half-yearly results, ending up with a 99.5% boost to its net profit.
The positive numbers resulted in a 40% increase in dividends, which saw managing director and major shareholder Anthony Scali pocket $4.4 million.
This situation triggered political outrage as the retailer had pocketed about $7.7 million in JobKeeper over the 2020 calendar year.
“Nick Scali’s corporate social responsibility policy says the firm isn’t just there for the shareholders, so if they really believe that they’d hand the money back,” federal Labor politician Andrew Leigh told Nine newspapers at the time.
“The Scali family has done extremely well… They simply didn’t need taxpayer support and they should give it back to people who need it.”
Nick Scali agrees to hand back money — but not all of it
Nick Scali on Monday night relented to public pressure, although it didn’t cave all the way.
The furniture retailer announced after ASX close of trade that it would return $3.6 million of wage subsidies.
“The company fully recognises that it has benefited from the increased consumer confidence this program has created, which has resulted in record sales and net profit after tax,” stated the company.
“The company is very appreciative of the federal government’s JobKeeper policy, which was highly successful and of great assistance at the height of the pandemic.”
Nick Scali, which has a market capitalisation of $920 million, pointed out it needed the subsidy to counter government-enforced lockdowns.
“The JobKeeper scheme enabled the company to continue to pay employees throughout the state government-mandated closures in Melbourne throughout August, September and October,” it stated.
“And continue to pay employees in full during other temporary COVID-related store closures in South Australia and Western Australia as recently as last week.”
The Nick Scali share price was up 2.21% at the time of writing on Tuesday morning.
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Motley Fool contributor Tony Yoo has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.