Highlights

• Nick Scali lifted FY26 revenue 4.3% to $516.7 million while statutory net profit after tax climbed 31.2% to $75.7 million.

• Gross margin widened to 65.6% from 63.5%, and operating cash flow rose 33.7% to $154.4 million.

• The UK segment cut its pre-tax loss to $4.8 million from $13.7 million as gross margin reached 60.3%.

• The board declared a fully franked final dividend of 39 cents per share, payable on 22 October 2026.

A 2.1 percentage-point gain in gross margin did most of the heavy lifting at Nick Scali Limited (ASX:NCK) in FY26. Revenue grew a modest 4.3% to $516.7 million, yet statutory net profit after tax jumped 31.2% to $75.7 million. Shares were trading at A$12.65 on 23 October 2026, up 5.15%.

Margin Does the Heavy Lifting

Gross margin reached 65.6% for the year ended 30 June 2026, up from 63.5% a year earlier. That lifted underlying net profit after tax 22.1% from $62.0 million, a comparison that strips out $2.4 million of Anglia restructuring costs and a $2.8 million freight forwarder failure in Australia and New Zealand from FY25. Basic earnings per share rose to 88.5 cents from 67.5 cents.

Underlying operating costs increased $5.0 million, or 3.0%, mostly on employee and marketing expenses in Australia and New Zealand. Operating cash flow rose 33.7% to $154.4 million. Cash and bank deposits closed the year at $106.6 million, leaving net cash of $34.9 million after $71.7 million of borrowings.

Home Market Grows, UK Business Resets

The Australia and New Zealand division, which covers the Nick Scali and Plush brands, produced revenue of $476.7 million, up 5.1%. Its gross margin was 66.0% and segment profit before tax reached $115.0 million, compared with $100.9 million the previous year.

The UK told a different story. Revenue slipped 4.3% to $40.0 million because showroom refurbishments disrupted the first half. Gross margin nonetheless climbed to 60.3% from 47.1%, and the segment loss before tax narrowed to $4.8 million from $13.7 million. Sixteen UK showrooms were converted to the Nick Scali Furniture brand and a UK warehouse began operating in June 2026.

Showrooms, Property and Payouts

The group ended June with 130 showrooms: 112 in Australia and New Zealand (64 Nick Scali and 48 Plush) and 18 in the UK.

During the year the group opened a Nick Scali showroom in Ballarat and Plush stores in Bendigo, Tuggerah and Cannington, and closed Nick Scali stores at Brisbane Airport and Toowoomba. Capital expenditure totalled $21.9 million, including $7.9 million for the Campbelltown store and $3.8 million for South Australian land earmarked for a distribution centre. The company also planned to buy a retail property in Richmond, Victoria, for $22 million in August 2026, expected to be debt funded.

Shareholders received a 39 cent fully franked interim dividend in March 2026. The board declared a further 39 cent fully franked final dividend on 7 August 2026, with a record date of 1 October 2026 and payment on 22 October 2026.

First Weeks of FY27 and Planned Openings

Early trading was mixed. Written sales orders in Australia and New Zealand were flat across the first five weeks of FY27, against high single-digit growth in the prior corresponding period. In the UK, written sales orders over the same five weeks rose 35%.

The company expects the four stores opened in FY26, plus two opened in July, to contribute positively to FY27 earnings. It plans four more openings in the Australian and New Zealand business during FY27. In the UK, which it describes as an important growth market, one store is planned for October and other locations are under negotiation.