Annual Report 2022
Bliss 3 Seater Lounge with Chaise. Parc Round Coffee Table. Russell Rug.
Ceres Round Dining Table. Bobbi Dining Chairs. Francesca Buffet.
2
Annual Report 2021 | Nick Scali Limited
Contents
Page
Page
Chairman and Managing Director’s Review
Directors’ Report
Auditor’s Independence Declaration
Consolidated Statement of comprehensive income
Consolidated Statement of financial position
Consolidated Statement of changes in equity
Consolidated Statement of cash flows
Directors’ Declaration
Independent Auditor’s Report
Shareholder Information
Corporate Information
5
6
17
20
21
22
23
47
48
52
54
Notes to the consolidated financial statements
Note 1. Basis of preparation
Note 2. Segment information
Note 3. Revenue and other income
Note 4. Expenses
Note 5. Current and deferred tax
Note 6. Earnings per share
Note 7. Dividends
Note 8. Reconciliation of profit after
income tax to net cash from operating activities
Note 9. Cash and cash equivalents
Note 10. Receivables
Note 11. Inventories
Note 12. Other financial assets
Note 13. Property, plant and equipment
Note 14. Leases
Note 15. Intangibles
Note 16. Borrowings
Note 17. Payables
Note 18. Deferred revenue
Note 19. Provisions
Note 20. Issued capital
Note 21. Reserves
Note 22. Financing facilities
Note 23. Financial instruments
Note 24. Contingent liabilities
Note 25. Commitments
Note 26. Employees
Note 27. Key management personnel
Note 28. Related party transactions
Note 29. Share-based payments
Note 30. Parent entity information
Note 31. Controlled entities
Note 32. Business Combinations
Note 33. Significant events after the reporting period
Note 34. Remuneration of auditors
Note 35. Summary of other significant accounting policies
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Annual Report 2022 | Nick Scali Limited
Historical Performance
Revenue ($m)
Net profit after tax ($m)
441.0
373.0
84.2
74.9
268.0
262.5
250.8
42.1
42.1
41.0
2018
2019
2020
2021
2022
2018
2019
2020
2021
2022
Showrooms
Dividends (cents per share)
108
70.0
65.0
58
57
61
51
47.5
45.0
40.0
2018
2019
2020
2021
2022
2018
2019
2020
2021
2022
4
Annual Report 2022 | Nick Scali Limited Chairman and Managing
Director’s Review
Overview
Despite the turbulent retail environment of the past 12 months,
we are pleased to report that Nick Scali Limited has had another
successful year, delivering record sales revenue and maintaining
underlying profitability at a similar level to the previous year. Further,
the Company successfully completed its first major acquisition,
purchasing Plush-Think Sofas Pty Ltd (“Plush”) for $103million in
November 2021.
Operating Performance
During the year, sales revenue increased by 18.0% to $441million,
with the Company benefiting from both the acquisition of Plush, and
an environment where consumers continued to invest in items for
the home. Sales revenue growth was restricted by lockdowns due
to government mandated store closures in the first half of the year
and lockdowns in sourcing countries toward the end of the financial
year which impacted the Company’s ability to recognise revenue
from delivered sales to customers.
Gross margin decreased by 250 basis points to 61.0%, due to
increased freight costs and the impact of the Plush acquisition, whilst
the operating costs of the existing Nick Scali Furniture business
remained tightly controlled in the face of inflationary headwinds. As
a consequence of the reduction in gross margin and after allowing
for the additional operating costs in the Plush business (including
significant one-off acquisition and restructuring costs), the Company
recorded a statutory net profit after tax of $75million.
During the year, the Group increased its borrowings by $65million
to fund the acquisition of Plush, whilst continuing to maintain its
strong working capital position. The Group generated an operating
cashflow before interest and tax of $163million, and by 30 June
2022, had repaid $10million of the new loan facility and returned
$49million to shareholders in dividends during the year.
Plush acquisition
On 1 November 2021, the Company acquired Plush from Greenlit
Brands Household Goods Pty Ltd for $103million, through a
combination of existing cash reserves and new borrowings.
Founded in 1999, Plush is a specialist Australian sofa retailer with a
focus on high quality, hand-crafted “built to last” sofas, and a network
of 46 showrooms across Australia. Positioned in the market as a
mid-premium sofa retailer with a focus on the aspirational customer
demographic, Plush provides the Group with the ability to create
Australia’s leading sofa retailer with a dual brand strategy targeting a
broad customer demographic.
the enhanced market positioning and
Given
the highly
complementary ‘made to order’ business models of Plush and
Nick Scali Furniture, we expect the acquisition to generate material
synergies and drive profit growth over the medium term. To date,
the Company has reduced operating expenses within the Plush
business by $18million per annum, through reductions in property,
employment and marketing expenses.
Impact of Covid
The Covid pandemic continued to have a significant impact on
the Company during the year, with government mandated store
closures resulting in over half of the store network being closed for
three months between August and November.
Furthermore, the Company was significantly impacted by Covid-
related lockdowns in sourcing countries, most notably in Vietnam
and China, where government mandated restrictions resulted in
supply delays and extended customer delivery lead-times.
Store network
During the year, one new Nick Scali Furniture store was opened in
Hastings, New Zealand – the Company’s first regional store in New
Zealand. This opening, along with Plush acquisition, resulted in the
Company having a combined store network of 108 stores at the
end of June 2022.
We believe that there is potential for Plush to operate a long-term
store network of between 90 and 100 stores, and that the Nick Scali
store network can be expanded to encompass at least 85 stores. In
the next financial year we expect to open six new stores across the
combined store network.
In addition to its significant lease portfolio, the Company currently
has around 40,000m2 of owned property in Australia, and during
the year the Company purchased a multi-purpose showroom and
distribution facility in Townsville which replaced the existing Nick
Scali Furniture showroom and provides the infrastructure for the
growth of both brands in North Queensland.
Alongside the store network, the Company has continued to grow
its successful online business, and as customer awareness of this
business increased during the periods of government mandated
store closures, online sales now represent around 7% of total
revenue.
Outlook
The Company’s future growth will primarily be driven by the
continuation of the new store rollout, as the Company extends the
store networks of both brands over the coming years.
In the short-term, the current elevated outstanding order bank will
drive material revenue growth in the first half of the new financial
year. However, the business expects to face inflationary pressure
on operating costs, as the global economic environment becomes
less favourable over the next 12-24 months.
Dividends
On 22nd August 2022, the Directors declared a fully franked final
dividend of 35.0 cents per share, bringing the total dividend for the
year to 70.0 cents per share. This represents a payout ratio of 76%.
The final dividend has a record date of 3rd October 2022 and will be
paid on 24th October 2022.
The Board recognises that the success of Nick Scali Limited is the
result of the dedication of our many employees and associates
across Australia and New Zealand, and this has been particularly
so over the last two years. We would like to take this opportunity to
thank them for their hard work and commitment to the Company.
Furthermore, the Board also takes this opportunity to thank our
customers and suppliers, and shareholders whose continuing
support underpins the performance of the Company.
5
Annual Report 2022 | Nick Scali Limited Directors’ Report
The directors present their report, together with the financial statements, on the consolidated entity (referred to hereafter as the ‘Group’)
consisting of Nick Scali Limited (referred to hereafter as the ‘Company’ or ‘parent entity’) and the entities it controlled at the end of, or
during, the year ended 30 June 2022.
Directors
The names and details of the Company’s directors (referred to hereafter as the ‘Board’) in office at any time during the financial year or
until the date of this report are as follows. Directors were in office for this entire year unless otherwise stated.
John Ingram
Carole Molyneux
Stephen Goddard
William Koeck
Anthony Scali
Principal activities
The principal activities of the Group during the year were the sourcing and retailing of household furniture and related accessories. No
significant change in the nature of these activities occurred during the year.
Dividends
Dividends paid during the year were as follows:
Final franked dividend for 30 June 2021: 25.0 cents (2020: 22.5 cents)
Interim franked dividend for 30 June 2022: 35.0 cents (2021: 40.0 cents)
2022
$’000
20,250
28,350
48,600
2021
$’000
18,225
32,400
50,625
In addition to the above dividend, since the end of the financial year directors have declared a fully franked final dividend of 35.0 cents per
fully paid ordinary share to be paid on 24 October 2022 out of retained profits at 30 June 2022.
Operating and financial review
Nick Scali Limited is a furniture retailer operating in Australia and New Zealand.
Acquisition of Plush-Think Sofas Pty Ltd
On 1 November 2021 the Company acquired Plush-Think Sofas Pty Ltd (‘Plush’) from Greenlit Brands Household Goods Pty Ltd for
a consideration of $102,522,000. The acquisition group was funded through a combination of new debt facilities and existing cash
reserves. The Group expects the acquisition to enable it to reach a wider customer demographic, and deliver operating synergies across
both existing and acquired businesses.
Following the acquisition of Plush, the business operates under two brands, Nick Scali Furniture and Plush-Think Sofas.
Group operating results
Revenue
Gross Margin %
Net profit after tax (NPAT)
Earnings per share (EPS)(cents)
2022
$’000
440,957
61.0
74,922
92.5
2021
$’000
373,040
63.5
84,241
104.0
% Change
18.2%
-11.1%
-11.1%
During the year, and despite significant shipping delays in the second half of the year due to the lockdown in Shanghai, the Group saw
sales revenue increase by 18.2% to $440,957,000, with Plush contributing $88,832,000 in sales revenue for period post-acquisition.
The Group’s overall gross margin was down 250 basis points to 61.0%, due to both the dilutive effect of the acquisition of the lower
margin Plush business and increases in the cost of international freight.
Operating expenses within the Nick Scali Furniture business remained at similar levels to previous years, and the Group continued to
leverage its fixed cost base to record strong levels of net profitability in the underlying Nick Scali Furniture business. However, due to
one-off acquisition and restructuring costs incurred in relation to Plush totalling $7,355,000, and the lower operating leverage in the Plush
business, total operating expenses were significantly higher than in the prior financial year, and net profit after tax was down 11.0% to
$74,922,000.
On an underlying basis, excluding one-offs, net profit after tax was down 4.9% to $80,154,000.
6
Annual Report 2022 | Nick Scali Limited
Directors’ Report (continued)
Reconciliation of underlying net profit after tax
Profit before tax
Income tax expense
Net profit after tax
Reported
$’000
107,956
(33,034)
74,922
One-offs
Acquisition Costs
Restructuring Costs
$’000
3,324
(915)
2,409
$’000
4,031
(1,209)
2,822
Underlying
$’000
115,311
(35,158)
80,153
The Group maintained a strong working capital position throughout the year, and increased its borrowings to fund the acquisition of Plush
through a new $65,000,000 loan facility. By 30 June 2022, $10,000,000 of the new loan facility had been repaid and the Group had net
assets of $140,928,000 at the end of the financial year.
Showroom network
Australia
New Zealand
Nick Scali Furniture (No.)
Plush (No.)
Total (No.)
57
46
103
5
–
5
During the year, 46 new stores were acquired as part of the
acquisition of Plush, and one new Nick Scali Furniture store was
opened in Hastings, New Zealand – the Company’s first regional
store in New Zealand.
The Company remains focused on its target of at least 85 Nick
Scali Furniture stores and between 90 and 100 Plush stores
across Australia and New Zealand, and in the next financial year
expects to open between four and six new stores across the
combined store network.
Covid-19 impact
Throughout the year, the Group continued to be impacted by the
issues arising from the Covid-19 pandemic and was required to
close various stores under government mandated lockdowns at
different times during the year. During the first half of the year,
over 50% of the store network was closed for a period of three
months, severely restricting trading in NSW, Victoria and New
Zealand.
Further, the Group was significantly impacted by lockdowns in
sourcing locations, with the extended closures of manufacturing
sites in Vietnam and port facilities in China negatively impacting
the Group’s delivery lead times.
Whilst the possibility of further lockdown remains, the Directors
are optimistic that the impact of the Covid-19 pandemic will be
much less pronounced in the next financial year.
People
The Group has a strong focus on attracting, engaging, developing,
and retaining top talent to ensure it remains an employer of
choice and maximises its potential to deliver growth. Investment
in training and leadership development ensures employees are
equipped to deliver in their varied roles, and best practice short-
term and long-term incentives are in place to reward exceptional
performance.
To deliver maximum shareholder value, and to maintain investor
and consumer confidence, the Group is committed to achieving
high levels of integrity and ethical standards across all areas of
the business. The Group has a Code of Conduct which sets out
the requirement for honesty, care, fair dealing, and integrity in the
conduct of all business activities.
The Group promotes workplace diversity and has zero tolerance
for discrimination and harassment, and ensures that Workplace
Health and Safety is a priority for all employees, along with that
of customers and suppliers.
Climate change
The Company has assessed that climate related risks do not
currently have a significant impact on the business.
Outlook
At 30 June 2022, the Group had an outstanding order book of
$185,284,000. Given this, and the incremental sales revenue
from the Plush business, the Company expects sales revenue for
the first half of the next financial year to be materially above the
previous year.
However, given the current global economic environment, the
business will face challenges in respect of potential rising freight
costs and inflationary pressure on operating costs over the next
12-24 months.
In the longer term, and following the successful acquisition of
Plush, the Company’s growth is expected be driven by the
continuation of the new store rollout program across both brands.
Significant changes in the state of affairs
Other than the acquisition of Plush-Think Sofas Pty Ltd on 1
November 2021 (and discussed above), there were no significant
changes in the state of affairs of the Company during the year.
Matters subsequent to the end of the financial year
Other than the dividend declared on 22 August 2022 (and
discussed above), no other matter or circumstance has arisen
since 30 June 2022 that has significantly affected, or may
significantly affect the Group’s operations, the results of those
operations, or the Group’s state of affairs in future financial years.
Likely developments and expected results
of operations
Refer to the Operating and financial review on page 6.
Environmental regulation
The Company is not subject to any significant environmental
regulation under Australian Commonwealth or State law.
The Directors are not aware of any particular or significant
environmental issues which have been raised in relation to the
Group’s operations during the financial year.
7
Annual Report 2022 | Nick Scali Limited
Directors’ Report (continued)
John Ingram
Information on directors
Name:
Title:
Qualifications: AM, FCPA
Experience and expertise:
John was appointed to the Board as non-executive Chairman in
Independent Non-Executive Chairman
April 2004, and was formerly Managing Director of Crane Group
Limited.
Other current directorships: Non-executive Chairman of Peter
Warren Automotive Holdings Limited (ASX: PWR).
(last three years): Non-executive
Former directorships
Chairman of Shriro Holdings Limited (ASX: SHM).
Special responsibilities: Member of the Audit and Risk
Committee.
Member of the Remuneration and Human Resources Committee.
Interests in shares: 385,000.
Carole Molyneux
Independent Non-Executive Director
Name:
Title:
Qualifications: BA (Hons)
Experience and expertise:
Carole was appointed to the Board in June 2014. Carole has
extensive experience in retail and was the Chief Executive Officer
of Suzanne Grae, (part of the Sussan Retail Group), for eighteen
years until 2013.
Other current directorships: Nil.
Former directorships (last three years): Nil.
Special responsibilities: Chairman of the Remuneration and
Human Resources Committee.
Member of the Audit and Risk Committee.
Interests in shares: 20,000.
Stephen Goddard
Independent Non-Executive Director
Name:
Title:
Qualifications: BSc (Hons), MSc
Experience and expertise:
Stephen was appointed to the Board in March 2018. Stephen
William (Bill) Koeck
Name:
Title:
Qualifications: LLB, LLM(Hons), Post Graduate Applied
Independent Non-Executive Director
Corporate Finance; admitted UK and
Australia
Experience and expertise:
Bill was appointed to the Board in August 2020. Bill is an
experienced legal adviser with over 40 years of experience in
mergers and acquisitions, equity capital markets, private equity,
restructuring and corporate governance. Bill is currently a
member of the Federal Governments Takeovers Panel.
Other current directorships: Non-Executive Chairman, Member
of Audit Risk and Governance Committee and Chairman of
Compensation and Nomination Committee for Coronado Global
Resources Inc (ASX: CRN).
Non-Executive Director of Poulos Bros.Group.
Former directorships (last three years): Nil.
Special responsibilities: Member of the Remuneration and
Human Resources Committee.
Member of the Audit and Risk Committee.
Interests in shares: 16,300.
Anthony Scali
Managing Director
Name:
Title:
Qualifications: BCom
Experience and expertise:
Anthony is Managing Director of Nick Scali Limited. Anthony
joined the Company in 1982 after completing a Bachelor of
Commerce degree at the University of New South Wales and
has almost 40 years’ experience in furniture retailing.
Other current directorships: Nil.
Former directorships (last three years): Nil.
Interests in shares: 11,039,474.
‘Other current directorships’
included above are current
directorships for listed entities only and exclude directorships of
all other types of entities, unless otherwise stated.
is an experienced retailer having held a broad range of senior
‘Former directorships (last 3 years)’ included above are
executive positions in the industry. These include Finance Director
directorships held in the last three years for listed entities only
and Operations Director for David Jones, founding Managing
and exclude directorships of all other types of entities, unless
Director of Officeworks, and various senior management roles
otherwise stated.
with Myer.
Other current directorships: Non-Executive Chairman and
Chairman of Remuneration and Nomination Committee of JB
Hifi Limited (ASX: JBH).
Non-Executive Director and Chairman of the Audit and Risk
Committee of GWA Group Limited (ASX: GWA).
Non-Executive Director and Chairman of the Audit and Risk
Committee of Accent Group Limited (ASX: AX1).
Former directorships (last three years): Nil.
Special responsibilities: Chairman of the Audit and Risk
Committee.
Member of the Remuneration and Human Resources Committee.
Interests in shares: 6,000.
At the date of this report, no Directors held options over ordinary
shares in the Company.
Company Secretary
The Company Secretary and Chief Financial Officer since
February 2019 is Christopher Malley. He is a current member
of the Institute of Chartered Accountants in England and Wales
and began his career in Audit and Advisory with Deloitte in their
consumer business practices in London and Sydney. Following
ten years with Pepsico International, Christopher’s retail career
began with MySale PLC before he joined Nick Scali as the
General Manager Finance in November 2017.
.
8
Annual Report 2022 | Nick Scali Limited
Directors’ Report (continued)
Special responsibilities of directors
Audit and Risk Committee
The members of the Audit and Risk Committee are as follows:
• Stephen Goddard (Chairman)
• William Koeck
• John Ingram
• Carole Molyneux
Remuneration and Human Resources Committee
The members of the Remuneration and Human Resources Committee are as follows:
• Carole Molyneux (Chairman)
• Stephen Goddard
• John Ingram
• William Koeck
Meetings of directors
The numbers of meetings of the Board and of each Board sub-committee held during the year ended 30 June 2022, and the numbers
of meetings attended by each director or sub-committee member, were:
John Ingram
Stephen Goddard
William Koeck
Carole Molyneux
Anthony Scali1
Directors’
Meetings
Held
Attended
Remuneration and Human
Resources Committee
Attended
Held
Audit and Risk
Committee
Held
Attended
10
10
10
10
10
10
10
10
10
10
2
2
2
2
–
2
2
2
2
–
4
4
4
4
–
4
4
4
3
–
1 Anthony Scali is not a member of the sub-committees, but was invited to attend the meetings of the sub-committees and his
attendance was recorded in the minutes.
Remuneration Report – Audited
The remuneration report details the remuneration arrangements for the key management personnel of the Group, in accordance with
the requirements of the Corporations Act 2001 and its Regulations. For the purposes of the report, key management personnel are
defined as those persons having authority and responsibility for planning, directing and controlling the major activities of the business.
1. Details of key management personnel
For the year ended 30 June 2022 the key management personnel (KMPs) of the Group consisted of the following directors:
John Ingram
– Non-Executive Chairman
Stephen Goddard – Non-Executive Director
– Non-Executive Director
William Koeck
Carole Molyneux
Anthony Scali
– Non-Executive Director
– Managing Director & Chief Executive Officer
And the following executives:
Christopher Malley – Chief Financial Officer & Company Secretary
John Austin – Chief Operating Officer
2. Remuneration strategy
The quality of Nick Scali Limited’s directors and executives is a major factor in the overall performance of the Group. To this end, the
Company believes that an appropriately structured remuneration strategy underpins a performance-based culture which in turn drives
shareholder returns. The Group’s remuneration strategy is therefore designed to attract and retain high quality and committed non-
executive directors and employees.
The executive remuneration and reward framework has two components:
• fixed remuneration comprising of salary and superannuation
• variable incentives comprising short-term incentives (STIs) in the form of a cash based reward and long-term incentives (LTIs) in the
form of an equity reward.
The variable incentives are designed to deliver value to executives for performance against a combination of Company profitability and
achievement against strategic goals. Short-term incentives motivate employees to achieve outstanding performance and are based on
current year predetermined key performance indicators (KPIs) such as profit after tax, and non-financial activities that achieve short to
medium term objectives, while long-term incentives align employees with shareholder interests and are based on maintaining long-term
shareholder value using performance measures such as EPS.
9
Annual Report 2022 | Nick Scali Limited
Directors’ Report (continued)
Remuneration Report – Audited (continued)
3. Remuneration and Human Resources Committee
The Remuneration and Human Resources Committee currently consists of the non-executive Board members and is responsible for:
• reviewing remuneration arrangements and succession planning of senior management, including the Managing Director and
engaging external compensation consultants if necessary.
• reviewing and approving any discretionary component of short and long-term incentives for the Managing Director and senior
executives.
• recommending to the Board any increase in the remuneration of existing senior employees of the Group for which Board approval is
required.
• recommending to the Board the remuneration of new senior executives appointed by the Group.
• the setting of overall guidelines for Human Resources policy, within which Senior Management determines specific policies.
• reviewing the performance of the Board and its sub-committees, with the advice of external parties if appropriate.
The Committee has met twice in the last twelve months. In addition, matters for consideration by the Committee have been dealt with
during various Board meetings, where all Remuneration and Human Resources Committee members were in attendance.
4. Remuneration structure
In accordance with corporate governance best practices, the remuneration structures for non-executive directors and executives are
separate.
4.1 Non-executive directors’ remuneration
Non-executive directors are paid a fixed annual fee, which is periodically reviewed. Non-executive directors do not receive any variable
renumeration and they are not entitled to participate in the Executive Performance Rights Plan.
Non-executive chairman and directors’ fees in place at 30 June 2022 and 30 June 2021 were as follows:
Base fee for Non-Executive Chairman
Base fee for Non-Executive Director
Additional fee for Audit and Risk Committee Chairman1
Additional fee for Audit and Risk Committee Member
Additional fee for Remuneration and Human Resources Committee Chairman1
Additional fee for Remuneration and Human Resources Committee Member
2022
$
200,000
100,000
20,000
5,000
10,000
3,000
2021
$
200,000
100,000
17,000
5,000
7,000
3,000
1 The additional fees for the Audit and Risk Committee Chairman and the Remuneration and Human Resources Committee Chairman
were increased during the year, with effect from 1 December 2021.
The pool for non-executive directors’ fees is capped at $1,000,000 per year as approved by shareholders at the Company’s Annual
General Meeting in October 2021.
4.2 Executive remuneration
The Group provides appropriate rewards to attract and retain key personnel. Base salaries, STIs and LTIs are established by the
Remuneration and Human Resources Committee for each executive having regard to the nature of each role, the experience of the
individual employee and the performance of the individual and are then approved by the Board. External consultants are engaged as
appropriate and market information is used to benchmark executive remuneration.
4.2.1 Service agreements
Details of the ongoing service agreements between the Company and executives considered KMPs, are as follows:
Name
Title
Commencement
date
Base salary including
superannuation
Termination benefit
Anthony Scali
Managing Director
24 May 2004
Christopher Malley
Chief Financial Officer
6 February 2019
$750,000
$300,000
–
3 months base salary
& Company Secretary
John Austin
Chief Operating Officer
1 July 2020
$350,000
3 months base salary
10
Annual Report 2022 | Nick Scali Limited
Directors’ Report (continued)
Remuneration Report – Audited (continued)
4.2.2 Targeted remuneration mix
The targeted proportions of the total remuneration opportunity for the executives considered to be key management personnel (KMPs)
for the 2022 financial year were:
Fixed Remuneration
Base Salary
Variable Remuneration
Short-term Incentive
Long-term Incentive
Managing Director
Other KMPs
50%
50%
50%
25%
–
25%
4.2.3 Fixed remuneration – Base Salary
Fixed compensation is set to provide a base level of compensation which is appropriate to the position and responsibility and is
competitive in the market. Fixed compensation is reviewed annually, with effect from 1 September each year, by the Remuneration
and Human Resources Committee with reference to the performance of both the business and the individual, the individual’s skills and
experience, comparative market compensation and where appropriate, external advice.
The Group provides superannuation contributions in line with statutory obligations with benefits being contributed to the employee’s
chosen superannuation fund.
4.2.4 Variable remuneration – Short-term incentive (STI)
The Company operates annual short-term incentive programs that reward KMPs on the achievement of predetermined KPIs
established each financial year, according to the accountabilities of their role and its impact on the Group’s performance. KPIs include
profit targets and personal performance criteria which are set to incentivise superior performance. Using KPIs which include profit
targets ensures that variable rewards are paid only when value is created for shareholders and Group profitability meets or exceeds
a level approved by the Board. STIs are linked to KPIs on a sliding scale which is established at the beginning of each financial year.
The STIs are paid in the form of cash bonuses and the Remuneration and Human Resources Committee is responsible for assessing
whether the KPIs are met and the STIs are payable.
The Managing Director may also recommend to the Board discretionary bonuses in exceptional circumstances to reward contributions
from high performing employees. The following table shows the STI cash bonus target and the amount achieved for each KMP in the
years ended 30 June 2022 and 30 June 2021:
Year ended 30 June 2022
Anthony Scali
Christopher Malley
John Austin
Year ended 30 June 2021
Anthony Scali
Christopher Malley
John Austin
Targeted STI Entitlement and KPIs
Non Financial
KPIs %
Financial
KPIs %
Total $
STI Achieved and KPIs
Financial
KPIs %
Non Financial
KPIs %
80%
100%
100%
80%
100%
100%
20%
750,000
–
–
150,000
150,000
20%
750,000
–
–
150,000
150,000
80%
100%
100%
80%
100%
100%
20%
–
–
20%
–
–
Total $
750,000
150,000
150,000
750,000
150,000
150,000
4.2.5 Variable remuneration – Long-term incentive (LTI)
Long-term incentives, in the form of the share rights offered under the Executive Performance Rights Plan (EPRP), are provided
to employees to align remuneration with the creation of shareholder value over the long-term. The EPRP is only made available to
executives and other employees who have been employed for more than 12 months who are able to influence the generation of
shareholder value and who have a direct impact on the Group performance against relevant long-term performance targets.
The Board has determined earnings per share (EPS) growth to be the most appropriate measure of long-term performance. Under
the EPRP, employees are granted rights to ordinary shares that will vest after a period of three years subject to the achievement of
specific levels of EPS growth. EPS is based on the Group’s underlying profit after tax and before non-recurring items, as determined
by the Board.
Under the EPRP the number of rights exercisable at the end of the vesting period is dependent on the level of EPS growth achieved
by the Company, as follows:
EPS growth (3 year CAGR)
Less than 5%
5%
5% to 10%
More than 10%
Percentage of rights exercisable
Nil
50%
Pro rata between 50% and 100%
100%
11
Annual Report 2022 | Nick Scali Limited
Directors’ Report (continued)
Remuneration Report – Audited (continued)
The number of rights granted is calculated by taking the relevant executive’s fixed annual remuneration and multiplying it by the relevant
predetermined LTI entitlement percentage of fixed remuneration and then dividing this by the Group’s volume weighted average share
price for the four-week period prior to the date of the release of the Group’s full year results.
Rights to ordinary shares may also be granted in accordance with the EPRP as a retention award where the only performance condition
is continued employment with the Group at the vesting date. During the year ended 30 June 2022, 60,000 such rights were awarded
to John Austin.
If the minimum level of EPS growth is not met or if the participant ceases to be employed by the Group, any unvested rights will
immediately lapse unless otherwise determined by the Board.
There is no exercise price for shares granted under the EPRP and the employees are able to exercise their rights up to two years
following the vesting date, after which time the rights will lapse. In the event of a takeover offer for the Company, the rights may, at the
discretion of the Board, vest in accordance with an assessment of performance with the performance period pro-rated to the date of
the takeover offer.
The LTI entitlement of executives considered KMPs is calculated as a percentage of fixed annual remuneration for the years ended 30
June 2022 and 30 June 2021 as follows:
Year ended 30 June 2022
Years of Service
Targeted LTI Entitlement
LTI Awarded
Anthony Scali
Christopher Malley
John Austin
41
4
2
0%
50%
50%
0%
50%
50%
Year ended 30 June 2021
Years of Service
Targeted LTI Entitlement
LTI Awarded
Anthony Scali
Christopher Malley
John Austin
40
3
1
0%
50%
50%
0%
50%
0%
Employees who have been granted rights are prohibited from entering transactions to limit the economic risk of such rights whether
through a derivative, hedge, or similar arrangement. In addition, employees are prohibited from entering margin lending arrangements
in respect of shares in the Company where those shares are offered as security for the lending arrangement.
4.2.6 Terms of performance and retention rights granted
The terms and conditions of each grant of rights to ordinary shares affecting the remuneration of employees in this financial year or
future reporting years are as follows:
Grant reference
Grant date1
FY22/24
FY21/23
FY20/22
20 Sep 2021
14 Sep 2020
13 Sep 2019
Vesting and
exercisable date
Aug 20242
Aug 20232
22 Aug 2022
Expiry date
Exercise price ($)
Fair value per right
at grant date ($)
30 Jun 2026
30 Jun 2025
30 Jun 2024
0.00
0.00
0.00
9.87
6.61
5.17
1 The grant date is the date at which the performance rights are communicated to the employees. The effective date of the grant, from
which the performance hurdles are measured, is the first day of the financial year in which the grant is made.
2 The exact vesting and exercisable date for rights that have not yet vested is currently indeterminate, and depends on the date of
meeting at which the Board can confirm the achievement of the long-term performance hurdles. This is typically four to eight weeks
following the end of the financial year.
4.2.7 Performance rights holding
The table below sets out the balance of performance rights held by executives considered KMPs.
Balance
1 July 2021
–
45,708
–
Balance
1 July 2020
–
Granted
–
12,669
12,669
Granted
–
23,810
21,898
–
–
Vested and
exercised
Forfeited
Balance
30 June 2022
–
–
–
–
–
–
–
58,376
12,669
Vested and
exercised
Forfeited
Balance
30 June 2021
–
–
–
–
–
–
–
45,708
–
Anthony Scali
Christopher Malley
John Austin
Anthony Scali
Christopher Malley
John Austin
12
Annual Report 2022 | Nick Scali Limited
Directors’ Report (continued)
Remuneration Report – Audited (continued)
4.2.8 Retention rights holding
The table below sets out the balance of retention rights held by executives considered KMPs.
Balance at 1 July 2021
Granted
Vested and exercised
Forfeited
Balance at 30 June 2022
Anthony Scali
Christopher Malley
John Austin
–
–
–
–
–
60,000
–
–
–
–
–
–
–
–
60,000
4.3 Group performance
The table below sets out the financial performance of the Group over the past five years:
Revenue ($m)
Net profit after tax ($m)
Earnings per share (Cents)
Ordinary dividends per share (Cents)
Share price at 30 June ($)
4.4 Remuneration outcomes
2018
2019
2020
2021
2022
CAGR (%)
250.8
268.0
262.5
41.0
50.6
40.0
6.73
42.1
52.0
45.0
6.26
42.1
51.9
47.5
6.48
373.0
84.2
104.0
65.0
11.72
441.0
74.9
92.5
60.0
8.26
15.0
16.3
16.3
10.7
5.3
4.4.1 Remuneration outcomes for non-executive directors
The tables below set out the remuneration outcomes for the non-executive directors for the years ended 30 June 2022 and 30 June
2021 respectively:
Year ended 30 June 2022
John Ingram
William Koeck
Carole Molyneux
Stephen Goddard
Year ended 30 June 2021
John Ingram
William Koeck1
Carole Molyneux
Stephen Goddard
Short-term benefits
Fees
Post-employment benefits
Superannuation
181,818
98,182
103,409
110,682
494,091
182,648
90,411
102,283
109,589
484,931
18,182
9,818
10,341
11,068
49,409
17,352
8,589
9,717
10,411
46,069
Total
200,000
108,000
113,750
121,750
543,500
200,000
99,000
112,000
120,000
531,000
1 William Koeck was appointed as a Non-executive Director on 1 August 2020
4.4.2 Remuneration outcomes for executive KMPs
The tables below set out the remuneration outcomes for the executive KMPs for the years ended 30 June 2022 and 30 June 2021
respectively:
Short-term benefits
Base Salary
$
Cash bonus (STI)
$
Post-employment
benefits
Superannuation
$
Long-term
benefits
Employee entitlements
$
Share-based
payments
Shares rights (LTI)
$
Total
$
Year ended 30 June 2022
Anthony Scali
Christopher Malley
John Austin
Year ended 30 June 2021
Anthony Scali1
Christopher Malley1
John Austin
726,437
276,423
305,548
750,000
150,000
150,000
1,308,408
1,050,000
803,723
308,723
288,723
750,000
150,000
150,000
1,401,169
1,050,000
23,567
23,567
23,567
70,700
21,277
21,277
21,277
63,831
11,243
–
1,511,247
–
–
145,473
238,985
595,462
718,100
11,243
384,458
2,824,809
11,852
–
–
–
1,586,852
82,938
–
562,938
460,000
11,852
82,938
2,609,790
1 In response to the Covid-19 crisis, executives accepted a voluntary 30% reduction to remuneration for the period 1 April 2020 to
30 June 2020. This was repaid as an ex-gratia payment in September 2020.
13
Annual Report 2022 | Nick Scali Limited
Directors’ Report (continued)
Remuneration Report – Audited (continued)
4.5 Additional disclosures relating to key management personnel
4.5.1 Interest in the Shares of the Company
The beneficial interest of each director in the contributed equity of the Company are as follows:
John Ingram
William Koeck
Carole Molyneux
Stephen Goddard
Anthony Scali
Balance at
1 July 2021
Received as part
of remuneration
Purchases
Disposals
Balance at
30 June 2022
Ordinary shares
Ordinary shares
Ordinary shares Ordinary shares
Ordinary shares
360,000
5,900
15,500
6,000
11,039,474
11,426,874
–
–
–
–
–
–
25,000
10,400
4,500
–
–
39,900
–
–
–
–
–
–
385,000
16,300
20,000
6,000
11,039,474
11,466,774
This concludes the remuneration report, which has been audited.
Indemnity and insurance of officers
The Company indemnifies all the directors and executive officers against certain liabilities incurred as such by a director or officer, while
acting in their respective capacity, and enters contracts insuring the directors and officers against liabilities of this nature. The premiums
paid under the terms of these contracts have not been determined on an individual director or officer basis, and the directors have not
included details of the nature of the liabilities covered or the amount of the premium paid in respect of the directors’ and officers’ liability
insurance contracts, as such disclosure is prohibited under the terms of the contract.
No other agreements to indemnify directors or officers have been entered into, nor have any payments in relation to indemnification
been made, during or since the end of the financial year, by the Company.
Indemnity and insurance of auditor
To the extent permitted by law, the Company has agreed to indemnify its auditors, Ernst & Young Australia (EY), as part of the terms
of audit engagement agreement against claims by third parties arising from the audit (for an unspecified amount) – except for any loss
in respect of any matters which are finally determined to have resulted from EY’s negligent, wrongful, or wilful acts or omissions. No
payment has been made to indemnify EY during or since the financial year.
Proceedings on behalf of the Company
No person has applied to the Court under section 237 of the Corporations Act 2001 for leave to bring proceedings on behalf of the
Company, or to intervene in any proceedings to which the Company is a party for the purpose of taking responsibility on behalf of the
Company for all or part of those proceedings.
Officers of the Company who are former partners of Ernst & Young
There are no officers of the Company who are former partners of Ernst & Young.
Corporate Governance Statement
Nick Scali Limited’s Corporate Governance Statement discloses how the Company complies with the recommendations of the ASX
Corporate Governance Council (4th Edition) and sets out the Group’s main corporate governance practices. This statement has been
approved by the Board and is current as of 30 June 2022. The Corporate Governance Statement of Nick Scali Limited can be found
on the Company’s website: www.nickscali.com.au/corporate-governance.
Rounding of amounts
The Company is of a kind referred to in Class Order 2016/191, issued by the Australian Securities and Investments Commission, relating
to ‘rounding-off’. Amounts in this report have been rounded off in accordance with that Class Order to the nearest thousand dollars, or
in certain cases, the nearest dollar.
14
Annual Report 2022 | Nick Scali Limited
Directors’ Report (continued)
Non-audit services
The Company may decide to employ the Company’s auditor, or its network firms, for non-audit services where their skills and expertise
are considered relevant.
During the year ended 30 June 2022, Ernst & Young Australia performed due diligence services on a acquisition and provided tax
compliance services. Details of the amount paid to the auditor for non-audit services are set out below.
Tax compliance services
Due diligence
2022
$’000
46
143
189
The directors are satisfied that the provisions of non-audit services are compatible with the general standard of independence for
auditors imposed by the Corporations Act 2001. The nature and scope of all non-audit services provided was approved by the Audit
and Risk Committee, and the directors are satisfied that the services provided do not compromise the integrity and objectivity of the
Company’s auditor for the following reasons:
• none of the services required the auditor to review or audit the auditors own work
• none of the services required the auditor to act in a management or decision-making capacity for the Company
• none of the services required the auditor to act as an advocate for the Company
• none of the services involved the auditor jointly sharing in the economic risks and rewards of the Company
• a declaration required by section 307C of the Corporations Act 2001 confirming their independence has been received from Ernst
& Young Australia
Auditor’s independence declaration
The Directors received the declaration from the auditor of Nick Scali Limited and is included on page 17 of the Financial Statements.
Auditor
Ernst & Young Australia continues in office in accordance with section 327 of the Corporations Act 2001.
This report is made in accordance with a resolution of directors, pursuant to section 298(2)(a) of the Corporations Act 2001.
On behalf of the directors
John Ingram
Chairman
22 August 2022
Sydney
Barrel Swivel Armchair.
Anthony Scali
Managing Director
Annual Report 2022 | Nick Scali Limited
15
Luzzi Queen Bed Frame, 100% Natural Leather. Agoura Dresser. Larry Rug.
16
Annual Report 2022 | Nick Scali Limited
Auditor’s Independence Declaration
Ernst & Young
200 George Street
Sydney NSW 2000 Australia
GPO Box 2646 Sydney NSW 2001
Tel: +61 2 9248 5555
Fax: +61 2 9248 5959
ey.com/au
Auditor’s Independence Declaration to the Directors of Nick Scali Limited
As lead auditor for the audit of the financial report of Nick Scali Limited for the financial year ended 30
June 2022, I declare to the best of my knowledge and belief, there have been:
a. No contraventions of the auditor independence requirements of the Corporations Act 2001 in
relation to the audit;
b. No contraventions of any applicable code of professional conduct in relation to the audit; and
c. No non-audit services provided that contravene any applicable code of professional conduct in
relation to the audit.
This declaration is in respect of Nick Scali Limited and the entities it controlled during the financial year.
Ernst & Young
Lisa Nijssen-Smith
Partner
22 August 2022
Annual Report 2022 | Nick Scali Limited
17
A member firm of Ernst & Young Global Limited
Liability limited by a scheme approved under Professional Standards Legislation
Autograph Right Corner Modular
with Chaise and Woodshelf.
Autograph Coffee Table Ottoman. Provence Console. Pemba Rug.
18
Annual Report 2022 | Nick Scali Limited
Annual Report 2022 | Nick Scali Limited
19
Consolidated statement of comprehensive income
For the year ended 30 June 2022
Revenue from contracts with customers
Cost of goods sold
Gross profit
Other income
Expenses
Marketing expenses
Employment expenses
General and administration expenses
Property expenses
Distribution expenses
Acquisition expenses
Depreciation and amortisation
Finance costs
Profit before income tax expense
Income tax expense
Note
2022
$’000
2021
$’000
3
3
4
4
32
5
440,957
(171,980)
373,040
(136,285)
268,977
236,755
1,554
1,582
(21,828)
(62,294)
(13,032)
(7,750)
(3,522)
(3,324)
(41,555)
(9,270)
107,956
(33,034)
(16,217)
(46,124)
(10,417)
(5,216)
(1,322)
–
(30,870)
(6,958)
121,213
(36,972)
Profit after income tax expense for the year attributable to the owners of
Nick Scali Limited
74,922
84,241
Other comprehensive income
Items that may be reclassified subsequently to profit or loss
Net change in the fair value of cash flow hedges taken to equity, net of tax
Exchange differences on translation of foreign operations
Other comprehensive income for the year, net of tax
Total comprehensive income for the year attributable to the owners of
Nick Scali Limited
647
(201)
446
4,858
13
4,871
75,368
89,112
CENTS
CENTS
Basic earnings per share
Diluted earnings per share
6
6
92.5
92.5
104.0
104.0
The above consolidated statement of comprehensive income should be read in conjunction with the accompanying notes
20
Annual Report 2022 | Nick Scali Limited
Consolidated statement of financial position
As at 30 June 2022
Assets
Current assets
Cash and bank deposits
Receivables
Inventories
Other financial assets
Prepayments
Total current assets
Non-current assets
Land and buildings
Plant and equipment
Right-of-use assets
Deferred tax
Intangibles
Total non-current assets
Total assets
Liabilities
Current liabilities
Borrowings
Payables
Lease liabilities
Deferred revenue
Current tax liabilities
Provisions
Total current liabilities
Non-current liabilities
Borrowings
Lease liabilities
Deferred revenue
Deferred tax
Provisions
Total non-current liabilities
Total liabilities
Net assets
Equity
Issued capital
Reserves
Retained profits
Total equity
Note
2022
$’000
2021
$’000
9
10
11
12
13
13
14
5
15
16
17
14
18
19
16
14
18
5
19
20
21
74,620
3,550
70,525
3,091
3,040
106,892
1,694
46,733
1,565
2,382
154,826
159,266
97,385
15,140
215,362
4,257
129,425
461,569
83,413
15,215
170,904
5,334
2,691
277,557
616,395
436,823
20,100
34,979
36,200
85,074
7,665
6,260
15,500
22,075
27,309
51,895
15,588
3,593
190,278
135,960
71,562
201,736
1,767
8,130
1,994
285,189
18,162
166,009
1,272
–
1,394
186,837
475,467
322,797
140,928
114,026
3,364
1,538
136,026
140,928
3,364
958
109,704
114,026
The above consolidated statement of financial position should be read in conjunction with the accompanying notes
21
Annual Report 2022 | Nick Scali Limited
Consolidated statement of changes in equity
For the year ended 30 June 2022
Issued
capital
$’000
Equity
benefits
reserve
$’000
Capital
profits
reserve
$’000
Cash flow
hedge
reserve
$’000
Foreign
exchange
reserve
$’000
Retained
profits
$’000
Total
equity
$’000
Balance at 1 July 2020
3,364
(352)
78
(3,760)
(4)
76,088
75,414
Profit after income tax expense for the year
–
Other comprehensive income for the year,
net of tax
Total comprehensive income for the year
Employee share rights recognised
under EPRP (Note 21)
Dividends paid during the year (Note 7)
–
–
–
–
–
–
–
125
–
–
–
–
–
–
–
–
–
–
84,241
84,241
4,858
13
–
4,871
4,858
13
84,241
89,112
Balance at 30 June 2021
3,364
(227)
78
1,098
Balance at 1 July 2021
3,364
(227)
78
1,098
Profit after income tax expense for the year
–
Other comprehensive income for the year,
net of tax
Total comprehensive income for the year
Employee share rights recognised
under EPRP (Note 21)
Dividends paid during the year (Note 7)
–
–
–
–
–
–
–
134
–
–
–
–
–
–
–
647
647
–
–
–
–
9
9
–
–
125
(50,625)
(50,625)
109,704 114,026
109,704 114,026
74,922
74,922
(201)
–
446
(201)
74,922
75,368
–
–
–
134
(48,600)
(48,600)
Balance at 30 June 2022
3,364
(93)
78
1,745
(192)
136,026 140,928
The above consolidated statement of changes in equity should be read in conjunction with the accompanying notes
22
Annual Report 2022 | Nick Scali Limited
Consolidated statement of cash flows
For the year ended 30 June 2022
Cash flows from operating activities
Receipts from customers
Payments to suppliers and employees
Interest received
Income tax payments
Note
2022
$’000
2021
$’000
500,023
(336,821)
426,170
(258,777)
163,202
167,393
92
(40,955)
367
(27,332)
Net cash from operating activities
8
122,339
140,428
Cash flows from investing activities
Purchase of property, plant and equipment
Purchase of intangible assets
Proceeds from the sale of property, plant and equipment
Acquisition of subsidiary, net of cash acquired
(18,422)
(557)
–
32
(102,522)
(15,325)
(312)
22
–
Net cash from investing activities
(121,501)
(15,615)
Cash flows from financing activities
Payment of dividends on ordinary shares
Proceeds from borrowings
Repayment of borrowings
Investment in term deposits
Repayment of lease liabilities
Interest payments – lease liabilities
Interest payments – borrowings
Net cash used in financing activities
Net (decrease)/increase in cash and cash equivalents
Cash and cash equivalents at the beginning of the financial year
7
14
14
(48,600)
72,500
(14,500)
(40,000)
(33,274)
(8,124)
(1,112)
(50,625)
–
–
–
(23,594)
(6,208)
(531)
(73,110)
(80,958)
(72,272)
106,892
43,855
63,037
Cash and cash equivalents at the end of the financial year
9
34,620
106,892
The above consolidated statement of cash flows should be read in conjunction with the accompanying notes
23
Annual Report 2022 | Nick Scali Limited
Notes to the consolidated financial statements
For year ended 30 June 2022
Note 1. Basis of preparation
Corporate information
Nick Scali Limited (the Company or the parent) is a for profit
company limited by shares incorporated in Australia whose
shares are publicly traded on the Australian Stock Exchange.
Basis of preparation
These general-purpose financial statements have been prepared
in accordance with Australian Accounting Standards and
Interpretations issued by the Australian Accounting Standards
Board (‘AASB’) and the Corporations Act 2001. These financial
statements also comply with International Financial Reporting
Standards as issued by the International Accounting Standards
Board (‘IASB’). The financial statements have been prepared
under the historical cost convention, except for derivative financial
instruments, which have been prepared at fair value. The financial
report was authorised for issue in accordance with a resolution of
the directors on 22 August 2022.
At the end of the reporting period the Group had a net
current liability position of $35,452,000. Within the net current
liability position, the Group has recorded deferred revenue of
$85,074,000 that is expected to be recognised as revenue within
the next 12 months, and accordingly the financial statements
continue to be prepared on a going concern basis.
Where necessary because of a change in the presentation of
certain expenses during the current year, comparative amounts
in the statement of comprehensive income have been reclassified
for consistency with presentation in the current year.
Basis of consolidation
The consolidated financial statements comprise the financial
statements of the Company and its subsidiaries as of 30 June
2022. A subsidiary is an entity that is controlled by the Company.
The Company controls an entity when it is exposed to, or has
rights to, variable returns from its involvement with the entity and
can affect those returns through its power over the entity.
The financial statements of the subsidiaries are included in
the consolidated financial statements from the date on which
control commences until the date on which control ceases.
Intercompany transactions, balances, and unrealised gains on
transactions between the Company and its subsidiaries are
eliminated. Accounting policies of the subsidiaries are consistent
with the policies adopted by the Company.
Changes in accounting policies, accounting standards and
interpretations
The accounting policies adopted in the preparation of the annual
financial statements are consistent with those followed in the
preparation of the annual financial statements for the period 30
June 2021.
In addition, the following accounting policies were adopted in
the preparation of the interim financial statements that were not
outlined in the annual report for the year ended 30 June 2021.
Business combinations
Acquisitions of subsidiaries and other business combinations
are accounted for using the acquisition method with the cost
of acquisition allocated to the fair value of the assets acquired
and liabilities assumed at the acquisition date. Acquisition costs
incurred are expensed during the financial year.
24
Business combination provisional accounting
The Group has 12 months from the acquisition date to finalise the
accounting for any business combination. Provisional accounting
is applied by the Group for business combinations where the
acquisition accounting is incomplete at the end of the reporting
period.
Significant accounting judgements, estimates
and assumptions
In the process of applying the Company’s accounting policies,
management has made judgements, estimates and assumptions.
All judgements, estimates and assumptions made are believed
to be reasonable, based on the most current information
available to management. Actual results may differ from these
judgements, estimates and assumptions. Judgements, estimates
and assumptions which have the most significant effect on the
amounts recognised in the financial statements:
Impairment of goodwill
The Company determines whether goodwill is impaired on an
annual basis. This requires an estimation of the recoverable
amount of the cash-generating unit to which the goodwill is
allocated. The assumptions used in this estimation of recoverable
amount and the carrying amount of goodwill is discussed in the
financial report.
Lease term of contracts with renewable options
The Company determines the lease term to be the non-
cancellable term of the lease, together with any periods covered
by an option to extend the lease if it is reasonably certain that
the option will be exercised. In assessing the likelihood of a
lease option being exercised, the Company considers the costs
of termination, the extent of any leasehold improvements, the
strategic importance of the lease location and the current market
rent for the site.
Estimation of useful lives of assets
The estimation of the useful lives of assets has been based on
historical experience as well as consideration of lease terms (for
assets used in or affixed to leased premises) and replacement
policies (for motor vehicles). In addition, the condition of the
assets is assessed at least once per year and considered against
the remaining useful life. Adjustments to useful lives are made
when considered necessary.
Net realisable value of inventory
Inventories are valued at the lower of cost and net realisable
value. Weighted average cost is used to value inventories.
Costs incurred in bringing each product to its present location
and condition including freight, cartage and import duties are
included in the cost of finished goods.
Net realisable value is the estimated selling price in the ordinary
course of business, less estimated costs necessary to make the
sale. Judgment is applied in assessing the net realisable value.
Valuation of brands acquired
Brand names acquired in a business combination are valued
at fair value using the relief from royalty method. This method
requires the Company to estimate future cashflows arising from
the brand, applicable royalty rates and appropriate discount
rates.
Annual Report 2022 | Nick Scali Limited Notes to the consolidated financial statements for year ended 30 June 2022 (continued)
Note 2. Segment information
The Company has identified the Managing Director and the Board of Directors as the chief operating decision makers. The Company
has one reportable segment being the retailing of furniture in Australia and New Zealand.
Note 3. Revenue and other income
Revenue
Revenue from contracts with customers
Other income
Net gain on disposal of property, plant and equipment
Net gain on disposal of right-of-use asset and remeasurement of lease liability
Rental income
Interest income
Sundry income
2022
$’000
2021
$’000
440,957
373,040
–
29
916
92
517
14
–
783
367
418
1,554
1,582
Recognition and measurement – Revenue
Revenue from contracts with customers is recognised at an amount that reflects the consideration to which the Group is expected
to be entitled in exchange for transferring goods or services to a customer. Contracts with customers provide for both the sale
of goods and the provision of accidental damage warranties, and the timing of the recognition of revenue of these separate
components is as follows:
Sale of goods
When recognising revenue in relation to the sale of goods to customers, the key performance obligation of the Group is the delivery of
the goods to the customer, and revenue is recognised at the time of delivery of the goods to the customer.
Accidental damage warranties
When recognising revenue in relation to accidental damage warranties, the key performance obligation of the Group extends over
the term of the warranty, and consequently revenue is recognised over the term of warranty, weighted according to the expected
occurrence of the performance obligations.
Note 4. Expenses
Profit before income tax includes the following specific expenses:
Included within employee expenses
Salaries, wages and fees
Government wage subsidies received as a consequence of Covid-19
Voluntary repayment of government wage subsidies
Superannuation contributions
Share-based payments
Included within property expenses
Short-term and low value lease payments
Rent concessions received as a consequence of Covid-19
2022
$’000
2021
$’000
41,533
(67)
–
4,374
625
1,588
(847)
33,805
(3,565)
2,471
3,265
210
697
(624)
25
Annual Report 2022 | Nick Scali Limited
Notes to the consolidated financial statements for year ended 30 June 2022 (continued)
Note 5. Current and deferred tax
Income tax expense
Current income tax charge
Adjustments in respect of current income tax of previous years
Relating to origination and reversal of temporary differences
Income tax expense
Numerical reconciliation of income tax expense and tax at the statutory rate
Profit before income tax expense
Income tax at the statutory tax rate of 30%
Adjustments in respect of current income tax of previous years
Adjustment for difference in overseas tax rates
Adjustment for share rights exercised
Adjustment for voluntary repayment of government wage subsidies
Adjustment for acquisition costs
Other items
Income tax expense
Deferred tax recognised comprises temporary differences attributable to:
Right-of-use assets
Lease liabilities
Brands
Deferred capital gains
Property, plant and equipment
Employee entitlements
Cashflow hedge (Note 23)
Other
Reflected in the statement of financial position as follows:
Deferred tax assets
Deferred tax liabilities
Deferred tax liabilities, net
2022
$’000
2021
$’000
33,138
(201)
97
33,034
37,527
(94)
(461)
36,972
107,956
121,213
32,387
36,369
(201)
(103)
(106)
–
991
66
(94)
(23)
(105)
741
–
84
33,034
36,972
(64,116)
70,899
(11,400)
(1,612)
(77)
2,034
(927)
1,326
(3,873)
4,257
(8,130)
(3,873)
(50,812)
57,480
–
(1,612)
(1,550)
1,153
(469)
1,144
5,334
5,334
–
5,334
Recognition and measurement – Income tax
Current tax assets and liabilities for the current and prior years are measured at the amount expected to be recovered from or paid to
the taxation authorities. The tax rates and tax laws used to compute the amount are those that are enacted or substantively enacted
by the reporting date.
Recognition and measurement – Deferred tax
Deferred income tax is provided on all temporary differences at the reporting date between the tax bases of assets and liabilities and
their carrying amounts for financial reporting purposes. Deferred income tax, assets and liabilities are measured at the tax rates that
are expected to apply to the year when the asset is realised or the liability is settled, based on tax rates (and tax laws) that have been
enacted or substantively enacted at the reporting date.
Income taxes relating to items recognised directly in equity are recognised in equity and not in profit or loss. Deferred tax assets and
deferred tax liabilities are offset only if a legally enforceable right exists to set off current tax assets against current tax liabilities and the
deferred tax assets and liabilities relate to the same taxable entity and the same taxation authority.
26
Annual Report 2022 | Nick Scali Limited
Notes to the consolidated financial statements for year ended 30 June 2022 (continued)
Note 6. Earnings per share
Profit after income tax attributable to the owners of Nick Scali Limited
2022
$’000
2021
$’000
74,922
82,241
Number
Number
Weighted average number of ordinary shares used in calculating basic earnings per share
81,000,000
81,000,000
Weighted average number of ordinary shares used in calculating diluted earnings per share
81,000,000
81,000,000
Basic earnings per share
Diluted earnings per share
Recognition and measurement – Earnings per share
Basic earnings per share
Cents
92.5
92.5
Cents
104.0
104.0
Basic earnings per share (EPS) is calculated as net profit attributable to members, adjusted to exclude costs of servicing equity (other
than dividends), divided by the weighted average number of ordinary shares, adjusted for any bonus element.
Diluted earnings per share
Diluted EPS adjusts the basic EPS to take account of the after-tax effect of dividends and interest associated with dilutive potential
ordinary shares that have been recognised as expenses; and other costs associated with dilutive potential ordinary shares and the
weighted average number of shares assumed to have been issued for no consideration.
Note 7. Dividends
Dividends
Dividends paid during the financial year were as follows:
Final fully franked dividend for 30 June 2021: 25.0 cents (2020: 22.5 cents)
Interim fully franked dividend for 30 June 2022: 35.0 cents (2021: 40.0 cents)
2022
$’000
2021
$’000
20,250
28,350
48,600
18,225
32,400
50,625
In addition to the above dividend, since the end of the financial year directors have declared a final fully franked dividend of 35.0 cents
per fully paid ordinary share to be paid on 24 October 2022 out of retained profits at 30 June 2022.
Franking credits
Franking credits are available to the Company as follows:
Franking credits available at the reporting date based on a tax rate of 30%
62,475
36,011
Franking credits that will arise from the payment of the amount of the provision
for income tax at the reporting date based on a tax rate of 30%
Franking credits available for subsequent financial years based on a tax rate of 30%
3,688
66,163
15,457
51,468
Franking credits available for future reporting periods based on a tax rate of 30%
54,013
42,789
Tax rate at which paid dividends have been franked
Tax rate at which dividends declared and unpaid will be franked
2022
%
30.0
30.0
2021
%
30.0
30.0
The above amounts represent the balance of the franking account as at the end of the financial year, adjusted for:
• franking credits that will arise from the payment of the amount of the provision for income tax at the reporting date
• franking debits that will arise from the payment of dividends recognised as a liability at the reporting date
• franking credits that will arise from the receipt of dividends recognised as receivables at the reporting date
27
Annual Report 2022 | Nick Scali Limited
Notes to the consolidated financial statements for year ended 30 June 2022 (continued)
Note 8. Reconciliation of profit after income tax to net cash from operating activities
Profit after income tax expense for the year
74,922
84,241
2022
$’000
2021
$’000
Investing and financing items included in profit after income tax expense:
Net loss on disposal of property, plant and equipment
Interest expense
Net gain on disposal of right use asset
Non-cash items included in profit after income tax expense:
Depreciation and amortisation expense
Share-based payments expense
Cash items not included in profit after income tax expense:
Purchase of shares under EPRP
Change in operating assets and liabilities:
Trade and other receivables
Inventories
Deferred tax
Prepayments
Other financial assets
Net fair value change on derivatives
Trade and other payables
Deferred revenue
Provision for income tax
Other provisions
Net foreign currency differences
Net cash from operating activities
Note 9. Cash and bank deposits
Cash at bank and on hand
Short-term deposits
Cash and cash equivalents
Term deposits
282
9,249
(29)
41,555
625
145
6,739
–
30,870
210
(352)
(105)
(1,426)
(14,034)
592
(162)
(1,671)
647
6,766
13,596
(7,923)
(230)
(68)
877
(10,460)
1,707
(291)
(6,936)
4,858
5,813
12,304
10,001
315
140
122,339
140,428
2022
$’000
34,620
–
34,620
40,000
74,620
2021
$’000
50,045
56,847
106,892
–
106,892
Recognition and measurement – Cash and bank deposits
Cash and cash equivalents comprise cash at bank and on hand and short-term deposits with an original maturity of three months or
less. Deposits are made for varying periods, depending on the immediate cash requirements of the Group. Deposits with an original
maturity of more than three months are recognised as term deposits.
For the purposes of the statement of cash flows, cash and cash equivalents consist of cash and cash equivalents as defined above.
28
Annual Report 2022 | Nick Scali Limited
Notes to the consolidated financial statements for year ended 30 June 2022 (continued)
Note 10. Receivables
Trade debtors
Other debtors
2022
$’000
1,823
1,727
3,550
2021
$’000
189
1,505
1,694
During the year ended 30 June 2022, $40,000 (2021: $2,000) was recognised as an expense for expected credit losses.
Recognition and measurement – Trade and other receivables
Trade and other debtors are initially recognised at fair value, less any allowance for expected credit losses. Trade debtors are generally
due for settlement within 30 days. Other debtors include receivables from suppliers and GST paid in advance. These are non-interest
bearing and are due for settlement between 30 and 90 days.
Note 11. Inventories
Finished goods – at net realisable value
Stock in transit – at cost
2022
$’000
47,997
22,528
70,525
2021
$’000
34,987
11,746
46,733
During the year ended 30 June 2022, $292,000 (2021: $620,000) was recognised as reduction in cost of goods sold for inventories
carried at net realisable value.
Recognition and measurement – Inventories
Inventories are valued at the lower of cost and net realisable value. Weighted average cost is used to value inventories. Costs incurred
in bringing each product to its present location and condition includes purchase price plus freight, cartage and import duties. Net
realisable value is the estimated selling price in the ordinary course of business, less estimated costs necessary to make the sale.
Note 12. Other financial assets
Derivative hedge receivable
Foreign exchange forward contracts
2022
$’000
3,091
3,091
2021
$’000
1,565
1,565
Foreign exchange forward contracts are held as hedging instruments against forecast purchases in USD. The notional amount of
foreign exchange forward contracts held on 30 June 2022 totalled $USD32,060,000 which covers between 50% and 100% of highly
probable purchases for the six months to 31 December 2022 (30 June 2021: $USD39,760,000). The average rate of foreign exchange
forward contracts held on 30 June 2022 was $USD0.74 (30 June 2021: $USD0.77).
Recognition and measurement – Other financial assets
Derivative hedge receivable
The Group uses derivative financial instruments, such as forward currency contracts, interest rate swaps and forward commodity
contracts, to hedge its foreign currency risks, interest rate risks and commodity price risks, respectively. Such derivative financial
instruments are initially recognised at fair value on the date on which a derivative contract is entered into and are subsequently
remeasured at fair value. Derivatives are carried as financial assets when the fair value is positive and as financial liabilities when the
fair value is negative.
Where derivative financial instruments are deemed to be effective hedges against foreign currency, interest rate, or commodity price
risks, the net gain or loss on the fair value of the instrument is recognised as other comprehensive. Where derivative financial instruments
are deemed to be ineffective hedges, the net gain or loss on the fair value of the instrument is recognised in profit or loss.
29
Annual Report 2022 | Nick Scali Limited
Notes to the consolidated financial statements for year ended 30 June 2022 (continued)
Note 13. Property, plant and equipment
Land &
buildings
$’000
Leasehold
improvements
$’000
Fixtures &
fittings
$’000
Motor
vehicles
$’000
Office
equipment
$’000
Total
$’000
Year ended 30 June 2022
At cost
104,824
Less, accumulated depreciation
(7,439)
22,318
(13,282)
2,292
(1,907)
Year ended 30 June 2021
At cost
Less, accumulated depreciation
97,385
9,036
385
90,164
(6,751)
83,413
21,215
(11,243)
9,972
950
(755)
195
921
(584)
337
747
(419)
328
14,692
(9,310)
145,047
(32,522)
5,382
112,525
12,794
(8,074)
125,870
(27,242)
4,720
98,628
Reconciliations
Reconciliation of the carrying amounts of property, plant and equipment at the beginning and end of the financial year:
Land &
buildings
$’000
Leasehold
improvements
$’000
Fixtures &
fittings
$’000
Motor
vehicles
$’000
Office
equipment
$’000
Balance at 1 July 2020
Additions
Disposals
Foreign currency translation
Depreciation expense
Balance at 30 June 2021
Acquisitions (Note 32)
Additions
Disposals
Foreign currency translation
Depreciation expense
Balance at 30 June 2022
74,488
10,080
–
–
(1,155)
83,413
–
15,398
(164)
–
(1,262)
97,385
9,362
2,896
–
(8)
(2,278)
9,972
2,245
1,267
(118)
(64)
(4,266)
9,036
227
4
–
–
(36)
195
286
6
–
(1)
(101)
385
303
126
(6)
–
(95)
328
36
85
–
(1)
(111)
337
Total
$’000
89,622
13,788
(6)
(9)
5,242
682
–
(1)
(1,203)
(4,767)
4,720
328
1,666
–
(11)
(1,320)
98,628
2,894
18,422
(282)
(77)
(7,060)
5,382
112,525
Land and buildings totalling $67.5m (2021: $83.4m) are used to secure bank loans relating to their purchase.
Recognition and measurement – Property, plant and equipment
All classes of property, plant and equipment are measured at cost, less accumulated depreciation and any impairment in value.
Depreciation is provided on a straight-line basis based on management’s estimate of both the residual value and the useful economic
life of the asset. The depreciation methods, residual values and useful lives are reviewed, and adjusted if appropriate, at each
reporting date.
Management’s current estimates of useful economic lives are as follows:
Buildings:
20 to 40 years
Leasehold improvements: 5 to 15 years (leasehold improvements are depreciated at
the shorter of the useful life or the term of the lease)
Furniture and fitting:
3 to 15 years
Motor vehicles:
Office equipment
6 years
(including IT equipment):
3 to 12 years
An item of property, plant and equipment is derecognised upon disposal or when there is no future economic benefit to the Company.
Gains and losses between the carrying amount and the disposal proceeds are taken to profit or loss.
The carrying values of property, plant and equipment are reviewed for impairment when events or changes in circumstances indicate
the carrying value may not be recoverable. For an asset that does not generate largely independent cash inflows, the recoverable
amount is determined for the cash-generating unit to which it belongs. If any such indication exists and where the carrying values
exceed the estimated recoverable amount, the assets or cash-generating units are written down to their recoverable amount.
30
Annual Report 2022 | Nick Scali Limited
Notes to the consolidated financial statements for year ended 30 June 2022 (continued)
Note 14. Leases
Lease liabilities
Current lease liabilities
Non-current lease liabilities
Reconciliation of lease liabilities
Opening lease liabilities
Lease modifications agreed during the year
Additional leases entered during the year
Acquisitions (Note 32)
Interest accrued
Lease repayments
Disposal
Foreign currency translation
Right-of-use assets
Right-of-use assets – at cost
Less, accumulated depreciation
Reconciliation of right-of-use assets
Opening right-of-use asset
Lease modifications agreed during the year
Additional right-of-use assets relating to leases entered during the year
Acquisitions (Note 32)
Acquired make good provision
Disposal of right-of-use assets relating to leases terminated during the year
Additional make good asset during the year
Depreciation
Foreign currency translation
2022
$’000
2021
$’000
36,200
201,736
27,309
166,009
237,936
193,318
193,318
6,742
11,484
62,172
8,124
(41,398)
(1,959)
(547)
181,203
8,934
26,509
–
6,207
(29,472)
–
(63)
237,936
193,318
344,184
(128,822)
270,663
(99,759)
215,362
170,904
170,904
6,742
11,484
62,172
251
(1,929)
18
(33,816)
(464)
161,734
8,934
26,509
–
–
(160)
–
(26,057)
(56)
215,362
170,904
Recognition and measurement – Leases
Lease liabilities
The Group enters non-cancellable leases for retail showrooms and warehouse facilities in Australia and New Zealand. Leases are
entered into for varying terms and rent reviews are based on CPI increases or fixed increases. A lease liability is recognised at the
commencement date of a lease at the present value of the lease payments to be made over the term of the lease.
Lease liabilities include known future payments for which the Group is contractually obliged under the terms of its non-cancellable
leases. Estimated future payments in respect of make-good clauses within non-cancellable leases are accounted for as provisions
(Note 19).
A number of the leases contain options to renew in favour of the Group. These options are negotiated by management to provide
flexibility in managing the leased-asset portfolio and align with the Group’s business needs. Management exercises judgement in
determining whether these extension options are reasonably certain to be exercised. The present value of the lease payments to
be made under options considered reasonably certain to be exercised have been included in the lease liability balance at 30 June
2022. The undiscounted potential future payments under options that are not considered reasonably certain to be exercised is
$131,321,000 which includes those that have an exercise date within the next five years of $51,750,000.
Right-of-use assets
Right-of-use assets are measured at cost at commencement of the lease and depreciated on a straight-line basis over the effective
life of the asset. The right-of-use assets have an effective life of between three and fourteen years dependent on the term of the lease
and the likelihood of the Company exercising any lease extension options in its favour.
31
Annual Report 2022 | Nick Scali Limited
Notes to the consolidated financial statements for year ended 30 June 2022 (continued)
Note 15. Intangibles
Year ended 30 June 2022
At cost
Less, accumulated amortisation
Year ended 30 June 2021
At cost
Less, accumulated amortisation
Goodwill
$’000
90,589
–
90,589
2,378
–
2,378
Brands
$’000
Website costs
$’000
38,000
–
38,000
–
–
–
2,367
(1,531)
836
1,165
(852)
313
Reconciliations
Reconciliation of the carrying amounts of intangibles at the beginning and end of the financial year:
Balance at 1 July 2020
Additions
Amortisation expense
Balance at 30 June 2021
Additions
Acquisitions (Note 32)
Amortisation expense
Balance at 30 June 2022
Goodwill
$’000
2,378
–
–
2,378
–
88,211
–
90,589
Brands
$’000
Website costs
$’000
–
–
–
–
–
38,000
–
38,000
47
312
(46)
313
557
645
(679)
836
Total
$’000
130,956
(1,531)
129,425
3,543
(852)
2,691
Total
$’000
2,425
312
(46)
2,691
557
126,856
(679)
129,425
No impairment losses have been recognised in the year ended 30 June 2022 (2021: $Nil)
Recognition and measurement – Intangibles
Goodwill and brands
Goodwill on acquisition is initially measured at cost, being the excess of the cost of the business combination over the Group’s interest
in the net fair value of the identifiable assets, liabilities, and contingent liabilities. Following initial recognition, goodwill is measured at cost
less any accumulated impairment losses.
Brand names acquired in a business combination are initially measured at fair value using the relief from royalty method. Following initial
recognition, brands are measured at cost less any accumulated impairment losses.
Goodwill and brands are reviewed for impairment annually, or more frequently if events or changes in circumstances indicate that their
carrying value may be impaired. Impairment is determined by assessing the recoverable amount of the cash generating unit (“CGU”), or
group of CGUs, to which the asset relates. The Group has determined that its CGUs are the individual showrooms, being the smallest
grouping of assets that generate cash inflows that are largely independent of the cash inflows from other assets or groups of assets.
The Group has determined that the relevant group of CGUs to which all of the Group’s goodwill and brands relate is the aggregation
of all CGUs within the Nick Scali Group, as it is not considered practicable to allocate these assets to smaller CGUs on a reasonable
and consistent basis.
It was previously determined that the relevant group of CGUs to which the Group’s goodwill related was the aggregation of all CGUs
in South Australia, as the goodwill had arisen on the acquisition of the store network in South Australia. During the year, this asset
was reallocated to the aggregated group of all CGUs within the Nick Scali Group, as this more accurately reflects the way in which
management monitor the activities of the business
The recoverable amount of the aggregation of all CGUs within the Nick Scali Group is based on their value in use, determined by
discounting the future cash flows expected to be generated by their continued use. The key assumptions, to which this determination
is most sensitive, relate to the following:
Sales revenue: Revenue for the next five years has been estimated with reference to the Group’s budget for the year ending 30 June
2023 and five-year forward-looking plans, adjusted for recent performance trends. Consideration was given to expected retail trading
conditions when estimating future revenue.
Gross margin: Gross margins have been estimated with reference to the Group’s budget for the year ending 30 June 2023, adjusted
where appropriate for expected future changes in the Group’s international supply chain.
32
Annual Report 2022 | Nick Scali Limited
Notes to the consolidated financial statements for year ended 30 June 2022 (continued)
Note 15. Intangibles continued
Terminal growth rate: Growth beyond the next five years has been estimated with reference to the expected long-term average growth
rate for Australia and New Zealand. The terminal growth rate was determined to be 2.0% (2021: 2.0%).
Discount rate: The discount rate is based on the specific circumstances of the Group and its CGUs and was derived from its weighted
average cost of capital. Consideration was given to the cost of both debt and equity, and the Group’s weighted average cost of capital
was determined to be 10.4% (2021: 8.0%).
At 30 June 2022, the recoverable amount of the CGU exceeded its carrying amount, and there are considered to be no reasonably
possible changes to any of the key assumptions that would cause the recoverable amount of the CGU to be less than its carrying
values, and consequently, no impairment has been recognised.
Website costs
The direct costs of developing the Group’s websites are measured at cost, less accumulated amortisation and any impairment in value.
The Group determines that the website will generate probable future economic benefits and recognises both internal expenditure and
external expenditure on website content as an intangible. The website costs are determined to have a finite life of between 3 and 5 years
and amortisation is provided on a straight-line basis over the useful life.
Note 16. Borrowings
Current bank loans
Non-current bank loans
Reconciliation of borrowings
Opening borrowings
Additional bank loans drawn during the year
Repayment of bank loans during the year
Repayment of bank loans during the year
2022
$’000
20,100
71,562
91,662
33,662
72,500
(14,500)
91,662
2021
$’000
15,500
18,162
33,662
33,662
–
–
33,662
The effective interest rates of the current and non-current bank loans are included at Note 23. The maturities of the non-current loans
are between 12 months and 52 months.
Recognition and measurement – Interest-bearing loans and borrowings
All loans and borrowings are initially recognised at the fair value of the consideration received less directly attributable transaction
costs. After initial recognition, interest-bearing loans and borrowings are subsequently measured at amortised cost using the effective
interest method. Fees paid on the establishment of loan facilities that are yield related are included as part of the carrying amount of
the loans and borrowings. Borrowing costs are recognised as an expense when incurred, unless they are directly attributable to the
acquisition, construction, or production of a qualifying asset whereby they are capitalised.
Borrowings are classified as current liabilities unless the Company has an unconditional right to defer settlement of the liability for at
least 12 months after the reporting date.
Note 17. Payables
Trade creditors
Other creditors and accruals
Trade creditors
2022
$’000
17,516
17,463
34,979
2021
$’000
11,542
10,533
22,075
Trade creditors are non-interest-bearing financial instruments and are normally settled within 30 days.
Other creditors
Other creditors are non-interest-bearing financial instruments and are normally settled on 30-day to 60-day terms.
Recognition and measurement – Payables
Trade and other payables are carried at amortised cost and due to their short-term nature they are not discounted. They represent
liabilities for goods and services provided to the Company prior to the end of the financial year that are unpaid and arise when the
Company becomes obliged to make future payments in respect of goods and services received.
33
Annual Report 2022 | Nick Scali Limited
Notes to the consolidated financial statements for year ended 30 June 2022 (continued)
Note 18. Deferred revenue
Customer deposits
Current accidental damage warranties
Current deferred revenue
Non-current accidental damage warranties
Non-current deferred revenue
2022
$’000
84,740
334
85,074
1,767
1,767
2021
$’000
51,418
477
51,895
1,272
1,272
86,841
53,167
Recognition and measurement – Deferred revenue
Customer deposits
Customer deposits represent amounts received from customers for orders not yet completed. Deposits received from customers are
recognised as revenue at the point of delivery of the goods to the customer. Orders are typically completed within three months and
deposits are therefore considered short-term in nature and are not discounted.
Accidental damage warranties
Accidental damage warranties are purchased by customers in conjunction with the purchase of goods and are initially measured
based on an allocation of the purchase price between the fair value of the goods and the warranty. Amounts deferred are recognised
as revenue over the term of the warranty. Accidental damage warranties classified as current will be recognised as revenue within 12
months of the reporting date.
Note 19. Provisions
Current employee entitlements
Current lease make good
Current provisions
Non-current employee entitlements
Non-current lease make good
Non-current provisions
2022
$’000
6,088
172
6,260
698
1,296
1,994
8,254
2021
$’000
3,462
131
3,593
387
1,007
1,394
4,987
Recognition and measurement – Provisions
Employee entitlements
Liabilities for annual leave and long service leave expected to be settled within 12 months of the reporting date are measured as the
amounts to be paid when the liabilities are settled and are discounted to net present value.
Liabilities for annual leave and long service leave not expected to be settled within 12 months of the reporting date are measured as the
present value of expected future payments to be made in respect of services provided by employees up to the reporting date using the
projected unit credit method. Consideration is given to the expected future wage and salary levels, experience of employee departures
and periods of service. Expected future payments are discounted using market yields at the reporting date on corporate bonds with
terms to maturity and currency that match, as closely as possible, the estimated future cash outflows.
Lease make good
A provision has been made for the present value of anticipated costs of future restoration of leased properties. The provision includes
future cost estimates associated with restoring the premises to its condition at the time the Company initially leased the premises,
subject to fair wear and tear.
34
Annual Report 2022 | Nick Scali Limited
Notes to the consolidated financial statements for year ended 30 June 2022 (continued)
2022
Shares
2021
Shares
2022
$’000
2021
$’000
Note 20. Issued capital
Authorised and fully paid ordinary shares
81,000,000
81,000,000
3,364
3,364
Ordinary shares
Ordinary shares entitle the holder to participate in dividends and the proceeds on the winding up of the Company in proportion to the
number of and amounts paid on the shares held. All ordinary shares carry one vote per share without restriction.
There are no other classes of equity securities.
Recognition and measurement – Issued share capital
Ordinary share capital is recognised at the fair value of the consideration received by the Company.
Any transaction costs arising on the issue of ordinary shares are recognised directly in equity as a reduction of the share proceeds
received, net of tax.
Note 21. Reserves
Capital profits reserve
Cash flow hedge reserve
Foreign exchange reserve
Equity benefits reserve
Movements in reserves
Equity
benefits
reserve
$’000
Capital
profits
reserve
$’000
Balance at 1 July 2020
Amounts recognised for cash flow hedges
Income tax on items taken directly to or transferred from equity
Purchase of shares under EPRP
Share based payments expense
Foreign currency translation differences
Balance at 30 June 2021
Amounts recognised for cash flow hedges
Income tax on items taken directly to or transferred from equity
Purchase of shares under EPRP
Share-based payments
Foreign currency translation differences
Balance at 30 June 2022
(352)
–
21
(105)
209
–
(227)
–
(139)
(352)
625
–
(93)
2022
$’000
78
1,745
(192)
(93)
1,538
2021
$’000
78
1,098
9
(227)
958
Total
$’000
Cash flow
hedge
reserve
$’000
(3,760)
6,937
(2,079)
–
–
–
78
–
–
–
–
–
78
1,098
–
–
–
–
–
647
–
–
–
–
Foreign
exchange
reserve
$’000
(4)
(4,038)
–
–
–
–
13
9
–
–
–
–
(201)
6,937
2,058
(105)
209
13
958
647
(139)
(352)
625
(201)
78
1,745
(192)
1,538
Equity benefits reserve
This reserve is used to record the value of share-based payments provided to employees as part of their remuneration. Refer to Note
29 for further details of these plans.
Capital profits reserve
This reserve is comprised wholly of the surplus on the disposal of assets that were acquired prior to the introduction of Capital Gains
Tax provisions.
Cash flow hedge reserve
This reserve is used to recognise the effective portion of the gain or loss on cash flow hedge instruments that are determined to be
effective hedges.
Foreign exchange reserve
This reserve is used to recognise differences arising where assets and liabilities denominated in foreign currencies are translated at the
functional currency exchange rate prevailing at the reporting date.
35
Annual Report 2022 | Nick Scali Limited
Notes to the consolidated financial statements for year ended 30 June 2022 (continued)
Note 22. Financing facilities
Unrestricted access was available to the following credit facilities at the reporting date:
Total facilities
Bank loans expiring within 12 months
Bank loans expiring in greater than 12 months
Interchangeable facilities, including letters of credit and bank guarantees
Bank guarantee facilities
Facilities used at reporting date
Bank loans expiring within 12 months
Bank loans expiring in greater than 12 months
Interchangeable facilities, including letters of credit and bank guarantees
Bank guarantee facilities
Facilities unused at reporting date
Bank loans expiring within 12 months
Bank loans expiring in greater than 12 months
Interchangeable facilities, including letters of credit and bank guarantees
Bank guarantee facilities
2022
$’000
2021
$’000
20,100
71,562
1,000
500
93,162
20,100
71,562
–
380
92,042
–
–
1,000
120
1,120
15,500
18,162
3,015
–
36,677
15,500
18,162
1,312
–
34,974
–
–
1,703
–
1,703
Note 23. Financial instruments
Financial risk management objectives
The Company has exposure to foreign exchange risk, interest rate risk, credit risk and liquidity risk.
The Company’s financial risk management policies are established to identify and analyse the risks faced by the Company, to set
appropriate risk limits and controls, and to monitor risks and adherence to limits. Risk management policies and systems are reviewed
regularly to reflect changes in market conditions and the Company’s activities.
The Board of Directors has overall responsibility for the establishment and oversight of the Company’s risk management framework.
The Board of Directors has established an Audit and Risk Committee, which is responsible for developing and monitoring the
Company’s risk management policies. The Committee provides regular reports to the Board of Directors on its activities.
The Company’s principal financial instruments comprise bank loans, and cash and short-term deposits. The main purpose of these
financial Instruments is to raise finance for and fund the Company’s operations. The Company has various other financial instruments
such as trade debtors and trade creditors, which arise directly from its operations. It is, and has been throughout the year, the
Company’s policy that no trading in financial instruments is undertaken.
Market risk
Market risk is the risk that changes in market prices such as foreign exchange rates and interest rates will affect the Company’s income
or the value of its holdings of financial instruments. The objective of market risk management is to manage and control exposure within
acceptable parameters while maximising return.
Foreign currency risk
All the Company’s sales are denominated in either Australian dollars or New Zealand dollars, whilst the majority of inventory purchases
are denominated in currencies other than Australian dollars, primarily US dollars. Where appropriate the Company uses forward
currency contracts and options to manage its currency exposures; and where the qualifying criteria are met, these are designated as
hedging instruments for the purposes of hedge accounting.
As of 30 June 2022, the Company had trade payables of $6,835,000 (2021: $3,318,000) denominated in US dollars and stock in
transit of $22,529,000 (2021: $11,746,000) denominated in US dollars, all of which are covered by designated cash flow hedges. As
a result, the sensitivity to a reasonably possible change in the US dollar exchange rate is minimal. The cash flows relating to cash flow
hedge positions held at year end are expected to occur in July 2022 through to December 2022, and the profit and loss is expected
to be affected through cost of sales as the hedged items (inventory) are sold to customers. All forecast transactions subject to hedge
accounting have occurred or are highly likely to occur.
36
Annual Report 2022 | Nick Scali Limited
Notes to the consolidated financial statements for year ended 30 June 2022 (continued)
Note 23. Financial instruments (continued)
During the year, the Company designated foreign currency forward contracts as hedges of highly probable purchases of inventory in US
dollars. The forecast purchases of inventory for which designated foreign currency forward contracts were in place at 30 June 2022 are
expected to occur during July 2022 through to December 2022.
The terms of the foreign currency forward contracts have been negotiated to match the terms of the forecasted transactions. Both
parties of the contract have fully cash collateralised the foreign currency forward contracts, and therefore, effectively eliminated any
credit risk associated with the contracts (both the counterparty’s and the Company’s own credit risk). Consequently, the hedges were
assessed to be highly effective. As of 30 June 2022, an unrealised gain of $647,000 (30 June 2021: an unrealised gain of $4,858,000)
is recorded in other comprehensive income.
Interest rate risk
Financial instruments utilised that are subject to interest, and therefore interest rate risk, are cash and commercial bills. Management
continually monitor the exposure to interest rate risk, and the following table sets out the carrying amount by maturity of the financial
instruments exposed to interest rate risk at reporting date. All financial instruments exposed to interest rate risk are exposed to a variable
interest rate.
The fair value of the cash, deposits and bank loans shown below are based on the face value of those financial instruments.
Weighted
average
interest rate
%
Assets less than three months – Cash
Assets between three months and 12 months – Deposits
Liabilities less than one year – Bank loans
Liabilities between one and five years – Bank loans
0.20
3.65
2.04
1.26
2022
2021
Weighted
average
interest rate
%
0.20
–
1.54
1.49
Balance
$’000
34,816
40,000
(20,100)
(71,562)
(16,846)
Balance
$’000
106,892
–
(15,500)
(18,162)
73,230
A reasonably possible decrease (or increase) in the interest rate of 50 basis points would result in a decrease (or increase) of profit of
$84,000 (2021: $45,000 on 50 basis points movement).
Credit risk
Credit risk refers to the risk that a counterparty will default on its contractual obligations resulting in a financial loss to the Company.
In most cases, the Company requires full and final payment either prior to, or upon delivery of the goods to the customer. In limited
cases where credit is provided, the Company trades on credit terms with recognised, creditworthy third parties. Customers who wish
to trade on credit terms are subject to credit verification procedures. In addition, receivable balances are monitored on an ongoing
basis with the result that the Company’s exposure to bad debts is not significant. There are no significant concentrations of credit risk
within the Company.
With respect to credit risk arising from financial assets of the Company, which comprise of cash and cash equivalents and receivables,
the Company’s maximum exposure to credit risk, excluding the value of any collateral or other security, at reporting date to recognised
financial assets is in the carrying amount, net of any provisions for doubtful debts, as disclosed in the statement of financial position
and notes to the financial statements. Cash and cash equivalents are only invested with corporations which are approved by the Board.
Liquidity risk
Liquidity risk is the risk that the Company will not be able to meet its financial obligations as they fall due. The Company’s approach to
managing liquidity is to ensure, as far as possible, that it will always have sufficient liquidity to meet its liabilities when due, under both
normal and stressed conditions.
The Company manages liquidity risk by maintaining adequate cash reserves and available borrowing facilities by continuously
monitoring actual and forecast cash flows and matching the maturity profiles of financial assets and liabilities.
The following tables detail the Company’s remaining contractual maturity for its financial instrument liabilities. The tables have been
drawn up based on the undiscounted cash flows of financial liabilities based on the earliest date on which the financial liabilities are
required to be paid. The tables include both interest and principal cash flows disclosed as remaining contractual maturities and
therefore these totals may differ from their carrying amount in the statement of financial position.
37
Annual Report 2022 | Nick Scali Limited
Notes to the consolidated financial statements for year ended 30 June 2022 (continued)
Note 23. Financial instruments (continued)
Less than
3 months
$’000
3 to 12
months
$’000
1 to 5
years
$’000
Over 5
years
$’000
Remaining
maturities
$’000
Year ended 30 June 2022
Interest bearing
Bank loans
Lease liabilities
Non–interest bearing
Trade creditors
Other creditors
Current tax liabilities
Year ended 30 June 2021
Interest bearing
Bank loans
Lease liabilities
Non-interest bearing
Trade creditors
Other creditors
Current tax liabilities
20,143
11,374
–
31,973
74,913
95,076
–
8,974
95,056
147,397
17,516
17,465
7,665
74,163
–
–
–
–
–
–
–
–
–
17,516
17,465
7,665
31,973
169,989
8,974
285,099
–
8,509
15,613
24,928
18,609
94,094
–
16,583
34,222
144,114
11,542
10,533
15,588
46,172
–
–
–
–
–
–
–
–
–
11,542
10,533
15,588
40,541
112,703
16,583
215,999
The cash flows in the maturity analysis above are not expected to occur significantly earlier than contractually disclosed above.
Fair value hierarchy
All financial instruments for which fair value is recognised or disclosed are categorised with the fair value hierarchy, described as
follows, based on the lowest level input that is significant to the fair value measurement as a whole:
Level 1: Quoted market prices in an active market (that are unadjusted) for identical assets or liabilities
Level 2: Valuation techniques for which the lowest level input that is significant to the fair value measurement is directly or indirectly
observable
Level 3: Valuation techniques for which the lowest level input that is significant to the fair value measurement is unobservable
At the reporting date the fair value of derivative financial instruments represented a derivative hedge receivable of $3,091,000
(2021: receivable of $1,565,000). All foreign currency forward contracts were measured at fair value using the Level 2 method. Unless
otherwise stated, the carrying amounts of financial instruments reflect their fair value.
Recognition and measurement – Financial instruments
Derivative financial instruments
Derivatives are initially recognised at fair value on the date a derivative contract is entered into and are subsequently remeasured to
their fair value at each reporting date. Recognition of the resulting gain or loss depends on whether the derivative is designated as a
hedging instrument and the nature of the item being hedged. As appropriate, the Company designates derivatives as either hedges
of the fair value of recognised assets or liabilities of firm commitments (fair value hedges) or hedges of highly probable forecast
transactions (cash flow hedges).
Assets and liabilities measured at fair value are classified, into three levels, using a fair value hierarchy that reflects the significance of
the inputs used in making the measurements. Classifications are reviewed at each reporting date and transfers between levels are
determined based on a reassessment of the lowest level of input that is significant to the fair value measurement.
For recurring and non-recurring fair value measurements, external valuers may be used when internal expertise is either not available
or when the valuation is deemed to be significant. External valuers are selected based on market knowledge and reputation. Where
there is a significant change in fair value of an asset or liability from one year to another, an analysis is undertaken, which includes
a verification of the major inputs applied in the latest valuation and a comparison, where applicable, with external sources of data.
38
Annual Report 2022 | Nick Scali Limited
Notes to the consolidated financial statements for year ended 30 June 2022 (continued)
Note 24. Contingent liabilities
In the ordinary course of business, the Group are subject to various legal actions and inquiries or investigations from regulators and
government bodies. Consideration has been given to all such matters at 30 June 2022, and no contingent liabilities were identified at
that date (30 June 2021: Nil).
Note 25. Commitments
Land and buildings
Leasehold improvements
Plant and equipment
Intangibles – Website costs
Note 26. Employees
The total number of employees at the reporting date was as follows:
Number of full-time and part-time employees at balance date
Note 27. Key management personnel
The aggregate compensation made to directors and other
key management personnel of the Company is set out below:
Short-term employee benefits
Long-term employee benefits
Post-employment benefits
Share-based payments
2022
$’000
6,729
43
1,391
440
8,603
2022
No.
2021
$’000
4,453
253
41
244
4,991
2021
No.
776
541
2022
$
2021
$
2,852,499
2,936,100
11,852
120,265
384,458
11,852
109,900
82,938
3,369,074
3,140,790
Note 28. Related party transactions
Related party transactions between the Company and the directors and personally related entities were made during the year in the
ordinary course of business on normal commercial terms and conditions. The nature of these dealings was primarily the reimbursement
of personal expenses incurred on Company paid credit cards and the purchase of products for their own use.
Receivables from and payables to related parties
There were no trade receivables from or trade payables to related parties on 30 June 2022 (2021: Nil).
Loans to or from related parties
There were no loans to or from related parties on 30 June 2022 (2021: Nil).
39
Annual Report 2022 | Nick Scali Limited
Notes to the consolidated financial statements for year ended 30 June 2022 (continued)
Note 29. Share-based payments
The Company has an Executive Performance Rights Plan (EPRP) which is provided for executives and other employees. In accordance
with the provisions of the plan, executives and employees are awarded rights to ordinary shares that will vest after a period of three
years subject to the achievement of specific performance hurdles in relation to earnings per share (EPS) growth. There is no exercise
price for the shares and the employees can exercise the right for up to two years following vesting, after which time the rights lapse.
In the year ended 30 June 2022 rights to ordinary shares were issued which include performance hurdles requiring compound annual
EPS growth of between 5% and 10%. Under the grant, 50% of the rights are exercisable on the achievement of 5% EPS growth,
100% on the achievement of 10% EPS growth, and for the achievement of between 5% and 10% EPS growth the number of rights
exercisable is calculated on a pro-rata basis.
The following table reconciles the outstanding employee share rights under the EPRP at the beginning and end of the financial year:
Outstanding share rights at the start of the year
Share rights granted
Share rights vested and exercised
Share rights forfeited
2022
146,459
108,914
(28,382)
–
2021
114,827
56,569
(12,469)
(12,469)
Outstanding share rights at the end of the year
226,991
146,459
The expense recognised in relation to employee share rights during the year was $624,600 (2021: $209,450).
Recognition and measurement – Share-based payments
Share-based payments are measured at the fair value of the rights at grant date and are expensed on a straight-line basis over the
vesting period, with a corresponding increase in equity, based on the Company’s estimate of the number of shares that will eventually
vest, considering the likelihood of employee turnover and the likelihood of non-market performance conditions being met.
The fair value of rights at grant date is valued under risk neutral conditions. Under these conditions the value of the right is equivalent
to the share price reduced by the present value of dividends payable on the shares until vesting. The present value of the dividends is
deducted from the share price because the right holder is not entitled to dividends until the rights are exercised. The valuation assumes
that the rights are exercised as they vest.
The key assumptions used for determining fair value at grant date are as follows:
Share price at grant date ($)
Dividend yield (%)
Franking rate (%)
Implied pre-tax effective dividend yield (%)
Note 30. Parent entity information
Set out below is the supplementary information about the parent entity.
Statement of financial position
Current assets
Non current assets
Total assets
Current liabilities
Non current liabilities
Total liabilities
Net assets
40
2022
12.36
9.0
30.0
12.9
2022
$’000
2021
8.75
6.5
30.0
9.3
2021
$’000
234,965
258,789
154,199
257,504
493,754
411,703
150,509
211,277
361,786
112,801
185,869
298,670
131,968
113,033
Annual Report 2022 | Nick Scali Limited
Notes to the consolidated financial statements for year ended 30 June 2022 (continued)
Note 30. Parent entity information (continued)
Equity
Issued capital
Capital profits reserve
Cash flow hedge reserve
Equity benefits reserve
Retained profits
Total equity
Statement of comprehensive income
Profit after income tax expense
Other comprehensive Income
Total comprehensive income for the year
2022
$’000
3,364
78
1,721
(93)
2021
$’000
3,364
78
1,098
(227)
126,898
108,720
131,968
113,033
66,778
446
67,224
83,481
4,858
88,339
Recognition and measurement – Principles of consolidation
The consolidated financial statements incorporate the assets and liabilities of all subsidiaries of Nick Scali Limited (‘Company’ or ‘parent
entity’) as of 30 June 2022 and the results of all subsidiaries for the year then ended. Nick Scali Limited and its subsidiaries together
are referred to in these financial statements as the Group.
Subsidiaries are all those entities over which the Company has control. The Company controls an entity when it is exposed to, or has
rights to, variable returns from its involvement with the entity and can affect those returns through its power to direct the activities of
the entity. Subsidiaries are fully consolidated from the date on which control is transferred to the Group. They are de-consolidated from
the date that control ceases.
Intercompany transactions, balances, and unrealised gains on transactions between entities in the Group are eliminated. Unrealised
losses are also eliminated unless the transaction provides evidence of the impairment of the asset transferred.
Note 31. Controlled entities
Subsidiaries
The consolidated financial statements incorporate the assets, liabilities, and results of the following subsidiaries in accordance with the
accounting policy described in this financial report
Name of entity
Country of incorporation
Class of shares
Nick Scali (New Zealand) Limited
New Zealand
Nick Scali Employee Share Scheme Pty Limited Australia
Plush-Think Sofas Pty Limited
Australia
Ordinary
Ordinary
Ordinary
2022
%
100.0
100.0
100.0
2021
%
100.0
100.0
–
Closed Group
Pursuant to ASIC Corporations (Wholly-owned Companies) Instrument 2016/785, Nick Scali Limited, Plush-Think Sofas Pty Limited
and Nick Scali Employee Share Scheme Pty Ltd (the “Closed Group”) entered into a deed of cross guarantee on 30 June 2022. The
effect of the deed is that Nick Scali Limited has guaranteed to pay any deficiency in the event of winding up of any controlled entity or if
they do not meet their obligations under the terms of overdrafts, loans, leases or other liabilities subject to the guarantee. The controlled
entities within the Closed Group have also given a similar guarantee in the event that Nick Scali Limited is wound up or if it does not
meet its obligations under the terms of overdrafts, loans, leases or other liabilities subject to the guarantee.
41
Annual Report 2022 | Nick Scali Limited
Notes to the consolidated financial statements for year ended 30 June 2022 (continued)
Note 31. Controlled entities (continued)
The consolidated statement of profit or loss, consolidated statement of comprehensive income, summary of movements in consolidated
retained earnings and consolidated statement of financial position of the entities that are members of the Closed Group are as follows:
Closed Group
2022
$’000
426,730
(172,775)
5,265
(107,185)
(38,078)
(8,623)
105,334
(32,331)
73,003
647
647
73,650
108,870
73,003
(48,600)
133,273
70,369
6,255
66,382
3,091
2,982
149,079
97,385
12,502
198,065
129,425
437,377
586,456
Statement of profit or loss
Revenue from contracts with customers
Cost of goods sold
Other income
Operating expenses
Depreciation and amortisation
Finance costs
Profit before income tax expenses
Income tax expense
Profit for the year
Other comprehensive income
Net change in the fair value of cash flow hedges taken to equity, net of tax
Other comprehensive income for the year, net of tax
Total comprehensive income for the year, net of tax
Summary of movements in consolidated retained earnings
Retained earnings at the beginning of the year
Profit for the year
Dividends paid during the year
Retained earnings at the end of the year
Statement of financial position
Assets
Current assets
Cash and cash equivalents
Receivables
Inventories
Other financial assets
Prepayments
Total current assets
Non-current assets
Land and buildings
Plant and equipment
Right-of-use assets
Intangibles
Total non-current assets
Total assets
42
Annual Report 2022 | Nick Scali Limited
Notes to the consolidated financial statements for year ended 30 June 2022 (continued)
Note 31. Controlled entities continued
Liabilities
Current liabilities
Borrowings
Payables
Lease liabilities
Deferred revenue
Current tax liabilities
Provisions
Total current liabilities
Non-current liabilities
Borrowings
Lease liabilities
Deferred revenue
Deferred tax
Provisions
Total non-current liabilities
Total liabilities
Net assets
Equity
Issued capital
Reserves
Retained profits
Total equity
Closed Group
2022
$’000
20,100
34,107
33,028
81,685
7,228
6,151
182,299
71,562
186,385
1,767
4,189
1,886
265,789
448,088
138,368
3,364
1,731
133,273
138,368
Note 32. Business combinations
Acquisition of Plush-Think Sofas Pty Limited
Overview and strategic rationale
On 1 November 2021 the Company acquired 100% of the issued share capital of Plush-Think Sofas Pty Ltd for $102,522,000. The
Group expects the acquisition to enable it to expand its store network and leverage its existing distribution facilities.
The cashflow on acquisition was as follows:
Net cash acquired with the subsidiary
Cash paid
Purchase consideration transferred
Identifiable assets and liabilities acquired
$’000
7,784
(110,306)
(102,522)
The Group measured the value of the identifiable assets and liabilities at the date of acquisition at fair value. The acquired lease
liabilities were measured using the present value of the remaining lease payments, whilst the acquired right-of-use assets were
measured at an amount equal to the acquired lease liabilities.
43
Annual Report 2022 | Nick Scali Limited
Notes to the consolidated financial statements for year ended 30 June 2022 (continued)
Note 32. Business combinations (continued)
The fair values of the identifiable assets and liabilities of Plush-Think Sofas Pty Ltd at the date of acquisition were as follows:
Assets
Identifiable current assets
Cash and cash equivalents
Receivables
Inventories
Prepayments
Total identifiable current assets
Identifiable non-current assets
Plant and equipment
Right-of-use assets
Intangibles
Total identifiable non-current assets
Total identifiable assets
Liabilities
Identifiable current liabilities
Payables
Lease liabilities
Deferred revenue
Other financial liabilities
Provisions
Total identifiable current liabilities
Identifiable non-current liabilities
Lease liabilities
Deferred tax
Provisions
Total identifiable non-current liabilities
Total identifiable liabilities
Identifiable net assets
Cash paid
Identifiable net assets
Goodwill arising on acquisition
Value at
Acquisition
$’000
7,784
486
9,758
498
18,526
2,894
62,422
38,645
103,961
122,487
5,884
7,750
20,078
145
3,133
36,990
54,423
8,615
364
63,402
100,392
22,095
110,306
(22,095)
88,211
The goodwill recognised has been attributed to the expected synergies from combining the assets and activities of Plush with those
of the other companies in the Group.
There were no contingent liabilities identified within Plush-Think Sofas Pty Ltd at the date of acquisition.
Transaction costs
Transaction costs of $3,324,000 have been expensed and are included as acquisition expenses in the consolidated statement
of comprehensive income. These costs were paid before 30 June 2022 and are part of operating cash flows in the consolidated
statement of cash flows.
Reported impact of acquisition
Plush-Think Sofas Pty Ltd has contributed $88,832,000 of revenue for the period from 1 November 2021 to 30 June 2022. If the
acquisition had taken place on 1 July 2021, revenue for the Group would have increased by $50,350,000 to $491,017,000.
Due to the extensive effects of central group services provided by Greenlit Brands Holdings Limited to Plush-Think Sofas Pty Ltd prior
to the acquisition, and the integration of the business in to the Group subsequent to the acquisition, it is impracticable to determine
either the impact the acquisition has had on profit after tax for the period from 1 November 2021 to 30 June 2022, or the impact that
the acquisition would have had on net profit after tax had the acquisition occurred on 1 July 2021.
44
Annual Report 2022 | Nick Scali Limited
Notes to the consolidated financial statements for year ended 30 June 2022 (continued)
Note 33. Significant events after the reporting period
Other than the dividend declared on 22 August 2022 (see Note 7), no other matter or circumstance has arisen since 30 June 2022
that has significantly affected, or may significantly affect the Group’s operations, the results of those operations, or the Group’s state
of affairs in future financial years.
Note 34. Remuneration of auditors
During the financial year the following fees were paid or payable for services
provided by Ernst & Young, the auditor of the Company, and its network firms:
Audit services
Auditing the statutory financial report of the Company and its controlled
entities and auditing the statutory financial reports of any controlled entities
363,000
195,315
2022
$
2021
$
Other services
Due diligence services
Tax compliance
142,621
46,095
551,716
145,000
30,936
371,251
Note 35. Summary of other significant accounting policies
Current and non-current classification
Assets and liabilities are presented in the statement of financial position based on current and non-current classification.
An asset is classified as current when: it is either expected to be realised or intended to be sold or consumed in normal operating cycle;
it is held primarily for the purpose of trading; it is expected to be realised within 12 months after the reporting year; or the asset is cash
or cash equivalent unless restricted from being exchanged or used to settle a liability for at least 12 months after the reporting year. All
other assets are classified as non-current.
A liability is classified as current when: it is either expected to be settled in normal operating cycle; it is held primarily for the purpose of
trading; it is due to be settled within 12 months after the reporting year; or there is no unconditional right to defer the settlement of the
liability for at least 12 months after the reporting year. All other liabilities are classified as non-current.
Deferred tax assets and liabilities are always classified as non-current.
Other taxes
Revenues, expenses, and assets are recognised net of the amount of Goods and Services Tax (‘GST’) except:
•
when the GST incurred on a purchase of goods and services is not recoverable from the taxation authority, in which case the GST
is recognised as part of the cost of acquisition of the asset or as part of the expense item as applicable; and
•
receivables and payables, which are stated with the amount of GST included.
The net amount of GST recoverable from, or payable to, the taxation authority is included as part of receivables or payables in the
statement of financial position. Cash flows are included in the statement of cash flows on a gross basis and the GST component of
cash flows arising from investing and financing activities, which is recoverable from, or payable to the taxation authority are classified
as operating cash flows. Commitments and contingencies are disclosed net of the amount of GST recoverable from, or payable to,
the taxation authority.
Foreign currency translation
The financial statements are presented in Australian dollars, which is Nick Scali Limited’s functional and presentation currency.
Foreign currency transactions
Foreign currency transactions are translated into Australian dollars using the exchange rates prevailing at the dates of the transactions
or at the hedged rate if qualifying financial instruments have been used to reduce exposure. Monetary assets and liabilities denominated
in foreign currencies are retranslated at the financial year-end exchange rates and recognised in profit or loss.
All exchange differences are recognised in the statement of comprehensive income, except when deferred in equity as qualifying cash
flow hedges.
45
Annual Report 2022 | Nick Scali Limited
Notes to the consolidated financial statements for year ended 30 June 2022 (continued)
Note 35. Summary of other significant accounting policies (continued)
Foreign operations
The assets and liabilities of foreign operations are translated into Australian dollars using the exchange rates at the reporting date.
The revenues and expenses of foreign operations are translated into Australian dollars using the average exchange rates, which
approximate the rates at the dates of the transactions, for the period. All resulting foreign exchange differences are recognised in other
comprehensive income through the foreign currency reserve in equity.
Government grants
Government grants are recognised where there is reasonable assurance that the grant will be received and all attached conditions will
be complied with. When the grant relates to an expense item, it is recognised as a reduction of the expense to which it relates.
Rent concessions
The practical expedient to AASB16 Covid-19 Related Rent Concessions has been adopted. This allows for an election to not account
for changes in lease payments as a lease modification where a change in lease payments to the revised consideration are substantially
the same or less than the consideration for the lease preceding the change, the reductions only affect payments which fall due before
30 June 2022 and there has been no substantive change in terms and conditions. Where the practical expedient has been applied,
rent concessions are accounted for as a reduction in property costs.
Derecognition of financial assets and financial liabilities
Financial assets
A financial asset (or, where applicable, a part of a financial asset or part of a group of similar financial assets) is derecognised when
either:
•
•
the rights to receive cash flows from the asset have expired; or
the Company retains the right to receive cash flows from the asset, but has assumed an obligation to pay them in full without
material delay to a third party under a ‘pass-through’ arrangement; or
•
the Company has transferred its rights to receive cash flows from the asset and either (a) has transferred substantially all the risks
and rewards of the asset, or (b) has neither transferred nor retained substantially all the risks and rewards of the asset but has
transferred control of the asset.
When the Company has transferred its rights to receive cash flows from an asset and has neither transferred nor retained substantially
all the risks and rewards of the asset nor transferred control of the asset, the asset is recognised to the extent of the Company’s
continuing involvement in the asset. Continuing involvement that takes the form of a guarantee over the transferred asset is measured
at the lower of the original carrying amount of the asset and the maximum amount of consideration received that the Company could
be required to repay.
Financial liabilities
A financial liability is derecognised when the obligation under the liability is discharged, cancelled, or expires. When an existing financial
liability is replaced by another from the same lender on substantially different terms, or the terms of an existing liability are substantially
modified, such an exchange or modification is treated as a derecognition of the original liability and the recognition of a new liability, and
the difference in the respective carrying amounts is recognised in profit or loss.
Provisions
Provisions are recognised when the Group has a present obligation (legal or constructive) because of a past event, it is probable that
an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable estimate can be made of
the amount of the obligation. When the Company expects a provision to be reimbursed, for example under an insurance contract, the
reimbursement is recognised as a separate asset but only when the reimbursement is virtually certain. The expense relating to any
provision is presented in the income statement net of any reimbursement. If the effect of the time value of money is material, provisions
are discounted using a current pre-tax rate that reflects the risks specific to the liability. When discounting is used, the increase in the
provision due to the passage of time is recognised as a borrowing cost.
Dividends
Dividends are recognised when declared during the financial year and no longer at the discretion of the Company.
Rounding of amounts
The Company is of a kind referred to in Class Order 2016/191, issued by the Australian Securities and Investments Commission,
relating to ‘rounding-off’. Amounts in this report have been rounded off in accordance with that Class Order to the nearest thousand
dollars, or in certain cases, the nearest dollar.
46
Annual Report 2022 | Nick Scali Limited Directors’ Declaration
In the Directors’ opinion:
• the attached financial statements and notes comply with the Corporations Act 2001, the Accounting Standards, the Corporations
Regulations 2001 and other mandatory professional reporting requirements;
• the attached financial statements and notes comply with the International Financial Reporting Standards as issued by the
International Accounting Standards Board as described in Note 1 to the financial statements;
• the attached financial statements and notes five a true and fair view of the Company’s financial position as at 30 June 2022 and of
its performance for the financial year ended on that date; and
• there are reasonable grounds to believe that the Company will be able to pay its debts as and when they become due and
payable.
• as at the date of this declaration, there are reasonable grounds to believe that the members of the Closed Group identified in
Note 31 will be able to meet any obligations or liabilities to which they are or may become subject, by virtue of the Deed of Cross
Guarantee.
The Directors have been given the declarations required by section 295A of the Corporations Act 2001.
Signed in accordance with a resolution of directors made pursuant to section 295(5)(a) of the Corporations Act 2001.
On behalf of the directors
Anthony Scali
Managing Director
John Ingram
Chairman
22 August 2022
Sydney
Parc TV Entertainment Unit.
Parc Console. Links Rug.
Annual Report 2022 | Nick Scali Limited
47
Independent Auditor’s Report
to the Members of Nick Scali Limited
Ernst & Young
200 George Street
Sydney NSW 2000 Australia
GPO Box 2646 Sydney NSW 2001
Tel: +61 2 9248 5555
Fax: +61 2 9248 5959
ey.com/au
Independent auditor’s report to the members of Nick Scali Limited
Report on the audit of the financial report
Opinion
We have audited the financial report of Nick Scali Limited (the Company) and its subsidiaries
(collectively the Group), which comprises the consolidated statement of financial position as at
30 June 2022, the consolidated statement of comprehensive income, consolidated statement of
changes in equity and consolidated statement of cash flows for the year then ended, notes to the
financial statements, including a summary of significant accounting policies, and the directors’
declaration.
In our opinion, the accompanying financial report of the Group is in accordance with the Corporations
Act 2001, including:
a. Giving a true and fair view of the consolidated financial position of the Group as at 30 June 2022
and of its consolidated financial performance for the year ended on that date; and
b. Complying with Australian Accounting Standards and the Corporations Regulations 2001.
Basis for opinion
We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities under
those standards are further described in the Auditor’s responsibilities for the audit of the financial
report section of our report. We are independent of the Group in accordance with the auditor
independence requirements of the Corporations Act 2001 and the ethical requirements of the
Accounting Professional and Ethical Standards Board’s APES 110 Code of Ethics for Professional
Accountants (including Independence Standards) (the Code) that are relevant to our audit of the
financial report in Australia. We have also fulfilled our other ethical responsibilities in accordance with
the Code.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis
for our opinion.
Key audit matters
Key audit matters are those matters that, in our professional judgment, were of most significance in
our audit of the financial report of the current year. These matters were addressed in the context of
our audit of the financial report as a whole, and in forming our opinion thereon, but we do not provide
a separate opinion on these matters. For each matter below, our description of how our audit
addressed the matter is provided in that context.
We have fulfilled the responsibilities described in the Auditor’s responsibilities for the audit of the
financial report section of our report, including in relation to these matters. Accordingly, our audit
included the performance of procedures designed to respond to our assessment of the risks of
material misstatement of the financial report. The results of our audit procedures, including the
procedures performed to address the matters below, provide the basis for our audit opinion on the
accompanying financial report.
A member firm of Ernst & Young Global Limited
Liability limited by a scheme approved under Professional Standards Legislation
48
Annual Report 2022 | Nick Scali Limited
Independent Auditor’s Report to the Members of Nick Scali Limited (continued)
Inventory Valuation
Why significant
How our audit addressed the key audit matter
As at 30 June 2022, the Group held $70.5 million in
inventories representing 11% of total assets. All inventory
within the Group is managed using consistent processes.
Our audit procedures assessed the valuation of inventories
and the related financial report disclosures. These
procedures included the following:
As detailed in Note 11 of the financial report, inventories are
valued at the lower of cost and net realisable value. There is
judgement involved in determining the cost of inventories
and in assessing net realisable value.
Assessed the application of inventory costing
-
methodologies, specifically in relation to freight and customs
duties, and whether this was consistent with Australian
Accounting Standards.
The cost of inventories includes elements relating to the
costs of freight and customs duties. Judgements were
involved in the process of allocating these costs to
inventories.
Assessed the effectiveness of relevant controls in
-
relation to the inventory costing process and assessed the
accuracy of the Group’s inventory valuation model, on a
sample basis.
There is judgement in estimating the value of inventory
which may be sold below cost and determining the net
realisable value of this inventory. Such judgements include
expectations for future sales and inventory clearance plans.
Assessed the basis by which the Group ensures
-
inventory was recorded at the lower of cost and net
realisable value, including the rationale for recording specific
adjustments to value inventory below cost. In doing so, we
examined sales margins achieved, the process for identifying
specific slow moving inventories, historical inventory
turnover and expected future sales.
Acquisition of Plush-Think Sofas
Why significant
How our audit addressed the key audit matter
On 1 November 2021, the Group completed the acquisition
of Plush-Think Sofas Pty Ltd (“Plush”) for consideration of
$102.5m.
The Group completed the acquisition accounting arising from
the Plush acquisition and recognised goodwill of $88.2m and
an intangible relating to the Plush brand of $38.0m. This
goodwill, along with goodwill from a previous acquisition,
has been allocated at the segment level being the lowest
level at which goodwill is being monitored by management.
Accounting for this acquisition was a complex and
judgemental exercise, requiring the Group to determine the
fair value of acquired assets and liabilities.
Disclosures in relation to the acquisition can be found in
Note 32 of the financial report.
Our audit procedures included the following:
We considered the terms of the agreement entered
-
into the acquire Plush and assessed whether the accounting
treatment was in accordance with Australian Accounting
Standards.
-
Assessed the valuation assumptions used in the
determination of the fair value of the acquired assets and
liabilities and the amount recognised as goodwill.
Involved valuation specialists in assessing the fair
-
value of the brand acquired.
Assessed the Group’s identified CGU and Goodwill
-
allocation with consideration of the Group’s reporting
segments, operations and strategy.
Assessed the adequacy of the financial report
-
disclosures contained in Note 32.
Information other than the financial report and auditor’s report thereon
The directors are responsible for the other information. The other information comprises the
information included in the Company’s 2022 annual report other than the financial report and our
auditor’s report thereon. We obtained the directors’ report that is to be included in the annual report,
prior to the date of this auditor’s report, and we expect to obtain the remaining sections of the annual
report after the date of this auditor’s report.
Our opinion on the financial report does not cover the other information and we do not and will not
express any form of assurance conclusion thereon, with the exception of the Remuneration Report
and our related assurance opinion.
A member firm of Ernst & Young Global Limited
Liability limited by a scheme approved under Professional Standards Legislation
Annual Report 2022 | Nick Scali Limited
49
Independent Auditor’s Report to the Members of Nick Scali Limited (continued)
In connection with our audit of the financial report, our responsibility is to read the other information
and, in doing so, consider whether the other information is materially inconsistent with the financial
report or our knowledge obtained in the audit or otherwise appears to be materially misstated.
If, based on the work we have performed on the other information obtained prior to the date of this
auditor’s report, we conclude that there is a material misstatement of this other information, we are
required to report that fact. We have nothing to report in this regard.
Responsibilities of the directors for the financial report
The directors of the Company are responsible for the preparation of the financial report that gives a
true and fair view in accordance with Australian Accounting Standards and the Corporations Act 2001
and for such internal control as the directors determine is necessary to enable the preparation of the
financial report that gives a true and fair view and is free from material misstatement, whether due to
fraud or error.
In preparing the financial report, the directors are responsible for assessing the Group’s ability to
continue as a going concern, disclosing, as applicable, matters relating to going concern and using the
going concern basis of accounting unless the directors either intend to liquidate the Group or to cease
operations, or have no realistic alternative but to do so.
Auditor’s responsibilities for the audit of the financial report
Our objectives are to obtain reasonable assurance about whether the financial report as a whole is
free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that
includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an
audit conducted in accordance with the Australian Auditing Standards will always detect a material
misstatement when it exists. Misstatements can arise from fraud or error and are considered material
if, individually or in the aggregate, they could reasonably be expected to influence the economic
decisions of users taken on the basis of this financial report.
As part of an audit in accordance with the Australian Auditing Standards, we exercise professional
judgment and maintain professional scepticism throughout the audit. We also:
► Identify and assess the risks of material misstatement of the financial report, whether due to
fraud or error, design and perform audit procedures responsive to those risks, and obtain audit
evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not
detecting a material misstatement resulting from fraud is higher than for one resulting from
error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the
override of internal control.
► Obtain an understanding of internal control relevant to the audit in order to design audit
procedures that are appropriate in the circumstances, but not for the purpose of expressing an
opinion on the effectiveness of the Group’s internal control.
► Evaluate the appropriateness of accounting policies used and the reasonableness of accounting
estimates and related disclosures made by the directors.
► Conclude on the appropriateness of the directors’ use of the going concern basis of accounting
and, based on the audit evidence obtained, whether a material uncertainty exists related to
events or conditions that may cast significant doubt on the Group’s ability to continue as a going
concern. If we conclude that a material uncertainty exists, we are required to draw attention in
our auditor’s report to the related disclosures in the financial report or, if such disclosures are
inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up
to the date of our auditor’s report. However, future events or conditions may cause the Group to
cease to continue as a going concern.
A member firm of Ernst & Young Global Limited
Liability limited by a scheme approved under Professional Standards Legislation
50
Annual Report 2022 | Nick Scali Limited Independent Auditor’s Report to the Members of Nick Scali Limited (continued)
► Evaluate the overall presentation, structure and content of the financial report, including the
disclosures, and whether the financial report represents the underlying transactions and events
in a manner that achieves fair presentation.
► Obtain sufficient appropriate audit evidence regarding the financial information of the entities or
business activities within the Group to express an opinion on the financial report. We are
responsible for the direction, supervision and performance of the Group audit. We remain solely
responsible for our audit opinion.
We communicate with the directors regarding, among other matters, the planned scope and timing of
the audit and significant audit findings, including any significant deficiencies in internal control that we
identify during our audit.
We also provide the directors with a statement that we have complied with relevant ethical
requirements regarding independence, and to communicate with them all relationships and other
matters that may reasonably be thought to bear on our independence, and where applicable, actions
taken to eliminate threats or safeguards applied.
From the matters communicated to the directors, we determine those matters that were of most
significance in the audit of the financial report of the current year and are therefore the key audit
matters. We describe these matters in our auditor’s report unless law or regulation precludes public
disclosure about the matter or when, in extremely rare circumstances, we determine that a matter
should not be communicated in our report because the adverse consequences of doing so would
reasonably be expected to outweigh the public interest benefits of such communication.
Report on the audit of the Remuneration Report
Opinion on the Remuneration Report
We have audited the Remuneration Report included in the directors’ report for the year ended 30
June 2022.
In our opinion, the Remuneration Report of Nick Scali Limited for the year ended 30 June 2022,
complies with section 300A of the Corporations Act 2001.
Responsibilities
The directors of the Company are responsible for the preparation and presentation of the
Remuneration Report in accordance with section 300A of the Corporations Act 2001. Our
responsibility is to express an opinion on the Remuneration Report, based on our audit conducted in
accordance with Australian Auditing Standards.
Ernst & Young
Lisa Nijssen-Smith
Partner
Sydney
22 August 2022
A member firm of Ernst & Young Global Limited
Liability limited by a scheme approved under Professional Standards Legislation
51
Annual Report 2022 | Nick Scali Limited Shareholder Information
Additional information required by the Australian Securities Exchange and not shown elsewhere in this report is as follows. The
information is current as at 15 July 2022.
Distribution of equitable securities
Analysis of number of equitable security holders by size of holding:
Shareholders Category
1 to 1,000
1,001 to 5,000
5,001 to 10,000
10,001 to 100,000
100,001 and over
Total
Number of holders of ordinary shares
2,864
2,117
467
354
27
5,829
Equity security holders
The names of the twenty largest security holders of quoted equity securities are listed below:
Number held
% of total shares issued
Ordinary shares
15,722,394
12,986,465
11,039,474
9,071,910
4,710,769
2,794,201
2,300,000
1,325,039
1,200,000
557,331
411,944
322,272
221,588
211,500
180,500
172,451
163,500
159,707
154,222
116,403
19.41
16.03
13.63
11.20
5.82
3.45
2.84
1.64
1.48
0.69
0.51
0.40
0.27
0.26
0.22
0.21
0.20
0.20
0.19
0.14
63,821,750
78.79
Number held
% of total shares issued
Ordinary shares
11,039,474
7,024,241
4,081,577
22,145,292
13.63
8.67
5.04
27.34
HSBC Custody Nominees (Australia) Limited
Citicorp Nominees Pty Limited
Scali Consolidated Pty Limited
J P Morgan Nominees Australia Pty Limited
National Nominees Limited
BNP Paribas Nominees Pty Ltd
Grahger Retail Securities Pty Ltd
BNP Paribas Nominees Pty Ltd
Molvest Pty Ltd
Citicorp Nominees Pty Limited
Netwealth Investments Limited
BNP Paribas Nominees Pty Ltd
BNP Paribas Nominees Pty Ltd
28421 Pty Ltd
Anacacia Pty Limited
NCH Pty Ltd
McNiven & Co Pty Ltd
UBS Nominees Pty Limited
BNP Paribas Nominees (NZ) Ltd
Mr William Francis Cannon
Substantial holders
Substantial holders in the Company are set out below:
Scali Consolidated Pty Limited
Magellan Financial Group Limited
Perpetual Limited
Voting rights
Ordinary shares
All ordinary shares carry one vote per share without restriction.
There are no other classes of equity securities.
52
Annual Report 2022 | Nick Scali Limited
Slab Dining Table. Slab Bench. Slab Buffet. Zeya Rug.
Annual Report 2022 | Nick Scali Limited
53
Corporate Information
Nick Scali Limited
ABN 82 000 403 896
Registered Office
Level 7, Triniti 2
39 Delhi Road
North Ryde NSW 2113
Telephone: 02 9748 4000
Website: www.nickscali.com.au
Company Secretary
Christopher Malley
Auditors
Ernst & Young
200 George Street
Sydney NSW 2000
Solicitors
Ashurst
Level 11, 5 Martin Place
Sydney NSW 2000
Share Registry
Link Market Services Limited
Level 12, 680 George Street
Sydney NSW 2000
Telephone: 02 8280 7100
Stock Exchange
Nick Scali Limited shares are
listed on the Australian
Securities Exchange
ASX code: NCK
Annual General Meeting
The Annual General Meeting will
be held at 100 Walker Street,
North Sydney at 11H00 on
Thursday 24th November 2022
5454
Annual Report 2022 | Nick Scali Limited
Store Locations
New South Wales
Alexandria
Auburn
Bankstown
Belrose
Bennetts Green
Campbelltown
Campbelltown Clearance
Caringbah
Castle Hill
Casula
Erina Clearance
Kotara
Marsden Park
Moore Park
Penrith
Prospect
Australian Capital
Territory
Fyshwick
Fyshwick Clearance
Queensland
Aspley
Bundall
Cairns
Fortitude Valley
Jindalee
Macgregor
Mackay
Maroochydore
Morayfield
North Lakes
Robina
Prospect Clearance
Skygate (Brisbane Airport)
Rutherford
Tuggerah
Warrawong
West Gosford
Toowoomba
Townsville
Virginia Clearance
Victoria
Chirnside
Craigieburn
Essendon
Dandenong Clearance
Frankston
Geelong
Maribyrnong
Moorabbin
Nunawading
Nunawading Clearance
Preston
Richmond
South Wharf
Springvale
Taylors Lakes
Tasmania
Hobart
South Australia
Gepps Cross
Glynde
Keswick
Marion
Western Australia
Cannington
Jandakot
Joondalup
Midland
O’Connor
Osborne Park
Osborne Park Clearance
New Zealand
Hamilton
Hastings
Mt Wellington
St Lukes
Wairau Park
New South Wales
Albury
Alexandria
Artarmon
Auburn
Belrose
Caringbah
Castle Hill
Crossroads
Newcastle
Prospect
Rutherford
Warrawong
West Gosford
Australian Capital
Territory
Fyshwick
Queensland
Aspley
Bundall
Fortitude Valley
Jindalee
Logan
Maroochydore
North Lakes
Toowoomba
Townsville
Victoria
Ballarat
Dandenong
Frankston
Geelong
Highpoint
Knox
Moorabbin
Nunawading
South Australia
Gepps Cross
Marion
Mile End
Western Australia
Joondalup
Midland
Myaree
Preston/Northland
Osborne Park
Richmond
Shepparton
Springvale
Taylors Lakes
Annual Report 2022 | Nick Scali Limited
55