Insights

Why the Nick Scali (ASX:NCK) share price is lifting today

The Nick Scali Limited (ASX: NCK) share price is up in early trade today following the release of its half-year results for 2021.
The post Why the Nick Scali (ASX:NCK) share price is lifting today appeared first on The Motley Fool Australia. –

A happy businessman pointing up, inidicating a rise in share price

The Nick Scali Limited (ASX: NCK) share price is climbing today following the release of its half-year results for 2021.

In opening trade, the furniture retailer’s shares are up 2.45% at $10.86.

What’s driving the Nick Scali share price?

The Nick Scali share price is climbing this morning after the company announced growth in all key metrics.

According to its release, Nick Scali delivered an exceptional six months of trading despite disruptive first-half trading conditions.

For the period ending 31 December, the company reported total sales revenue of $171.1 million. This reflected a record amount, and an increase of 24.4% on the previous $137.5 million attained in H1 FY20. Positive trading momentum continued across Australia and New Zealand complemented by growth in online shopping and new store openings.

Underlying net profit after tax (NPAT) came in at $40.5 million, up 89.9% on the prior corresponding period (pcp). This was in line with Nick Scali’s recent guidance announced on 5 January, 2021.

Earnings before interest, tax, depreciation and amortisation (EBITDA) soared to $60.2 million, reflecting a jump of 94.2% on the pcp.

Operating cash flow before interest and tax improved to $53.5 million due to a negative working capital model that led to larger profits. As a result, the company leaped over the same time last year metric which recorded $16.6 million, up 222.3%.

Underlying basic earnings per share (EPS) also rose to 50 cents against the comparable period which saw EPS at 25.1 cents.

The board declared a fully-franked interim dividend of 40 cents to be paid to eligible shareholders on 30 March, 2021. This accounts to a payout ratio of 80% compared H1 FY20’s payout ratio of 90% (25 cents paid to shareholders).

Nick Scali declared a healthy cash balance of $87.6 million on hand with minimal debt obligations.

Management commentary

Nick Scali managing director Anthony Scali welcomed the results, saying:

The first half of financial year 2021 had many challenges to navigate including government mandated store closures, supply chain issues and significant delays experienced with global shipping providers.

Despite these events, the team was able to capitalise on shifting consumer spending patterns and deliver a record result for the company.

Outlook

Looking ahead, Nick Scali expects its sales order growth to continue to run into the second half of FY21 period. In January alone, written sales orders increased by 47% on the pcp, representing the company’s largest trading month to date.

However, Nick Scali noted that extended lead times caused by delays in its supply chain process has been challenging. Furthermore, shipping constraints due to COVID-19 has made it difficult for the company to provide revenue guidance for H2 FY21.

Where to invest $1,000 right now

When investing expert Scott Phillips has a stock tip, it can pay to listen. After all, the flagship Motley Fool Share Advisor newsletter he has run for more than eight years has provided thousands of paying members with stock picks that have doubled, tripled or even more.*

Scott just revealed what he believes are the five best ASX stocks for investors to buy right now. These stocks are trading at dirt-cheap prices and Scott thinks they are great buys right now.

See The 5 Stocks

*Returns as of June 30th

More reading

Motley Fool contributor Aaron Teboneras 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.

The post Why the Nick Scali (ASX:NCK) share price is lifting today appeared first on The Motley Fool Australia.

Trade The World Anywhere & Anytime!

Mobile app platform with over 50,000 global listed securities across 12 markets (over 70% global market capitalisation), right from your Android or iOS device.

Integrated with exclusive trading idea and investment analysis tools to help you find actionable insight on virtually every financial instrument across our 12 global markets, to help you optimise your trading strategies.

Refer Your Friends

Tell your friends about Monex and gift them FREE access to our trading tools.

We respect your privacy and will only send this one email notification to your friends. 

Share With Your Friends

Share on facebook
Share on twitter
Share on linkedin

Monex Trading Tools Access and Usage Terms

The Monex Trading Tools (referred to as ‘tools’ hereafter) are available to you inside your client portal;


To activate access to the tools, you must have a verified and approved trading account and have made a deposit of at least AUD $1000.


An active and funded account with a positive trading balance is required to continue to have access to the tools;


Although the tools are available to you indefinitely, Monex Securities may at it’s discretion disable access to the tools in the future;


Monex securities reserves the right to change these terms and conditions from time to time, as it sees fit, without notice.

Important Notice
iOS & Android App - 12 International Markets & Over 70% Global Market Cap. $0 Brokerage On US Trades. Click Here!