NCK +10.5%: Delivered a decent half-year earnings report today with lower earnings versus the prior half but a beat on recently recut guidance.
- 1H25 revenue of $251m vs. $250.2 expected
- 1H25 net profit after tax of $30m, a 15% beat vs consensus of $26.5m
- Gross margin of 64.4% vs consensus 62.8% – impressive
- Declared dividend of 30cps vs. 24cps expected
Whilst sales were flat versus expectations, the beat on earnings came down to freight cost increases which were less severe than expected as per previous earnings guidance. They’ve demonstrated strong execution in the U.K business over the 1H, though a focus will be their continued ANZ store-rollout.
If 3 interest rate cuts in 2025 come to fruition, it’ll provide a significant relief for the consumer, and Nick Scali will be a major beneficiary – the business remains well positioned in the medium to long term and we continue to hold it in the Emerging Companies portfolio.
MM remains long and bullish NCK
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