Nick Scali Limited has reported a robust half-year performance with a 36% rise in net profit, driven by strong sales growth and margin improvements in Australia and New Zealand, while UK operations show signs of recovery following extensive store refurbishments.
- 36% increase in statutory net profit after tax for H1 FY26
- 13% sales growth and improved gross margins in Australia and New Zealand
- UK segment remains loss-making but shows improved sales orders and margins
- Six new stores planned in ANZ, with UK expansion opportunities underway
- Interim fully franked dividend declared at 39 cents per share
Strong Half-Year Growth in ANZ
Nick Scali Limited has reported a solid first half for the 2026 financial year, with statutory net profit after tax climbing 36% to $46.6 million in its core Australia and New Zealand (ANZ) market. This performance was underpinned by a 13% increase in sales revenue to $251.7 million and a notable 150 basis point improvement in gross profit margin to 65.9%. The company’s written sales orders also rose by over 10%, reflecting sustained consumer demand and effective operational execution.
UK Operations Show Signs of Recovery
While the UK segment remains in the red with a net loss of $5.6 million, this result aligns with prior forecasts and reflects the impact of extensive store refurbishments and rebranding efforts. Despite revenue falling to $17.6 million due to store closures, the UK business saw a significant gross margin improvement from 45.1% to 59.2%, alongside a 12.8% increase in written sales orders. These indicators suggest the turnaround strategy is gaining traction as the majority of refurbishments near completion.
Expansion Plans and Dividend Declaration
Nick Scali is actively expanding its footprint, with six new stores planned across ANZ in FY26 and several potential new locations under negotiation in the UK. This growth strategy aims to capitalise on the positive momentum in both markets. The board has declared a fully franked interim dividend of 39 cents per share, reflecting confidence in the company’s financial health and future prospects.
Looking Ahead
Early indicators for January 2026 show continued growth in ANZ with a 3.1% increase in written sales orders, while the UK stores that remained open during the prior year’s refurbishments posted a strong 32% like-for-like sales increase. As the refurbishment program concludes, the company is poised to leverage improved store experiences to drive further sales growth and margin expansion.
Bottom Line?
Nick Scali’s robust ANZ performance and UK turnaround set the stage for a pivotal year of expansion and profitability.
Questions in the middle?
- How quickly will the UK segment return to profitability post-refurbishment?
- What impact will new store openings have on overall margins and costs?
- How sustainable is the current sales momentum amid evolving consumer trends?