Annual Report 2023
Mako 4.5 Seat Dual Electric Recliners with Electric Headrests in platinum Vogar fabric.
Parc Oval Dining Table.
2
Annual Report 2023 | Nick Scali Limited Contents
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 Directory
Page
5
6
19
22
23
24
25
49
50
54
55
Notes to the consolidated financial statements
Note 1.
Note 2.
Note 3.
Note 4.
Note 5.
Note 6.
Note 7.
Note 8.
Basis of preparation
Segment information
Revenue and other income
Expenses
Current and deferred tax
Earnings per share
Dividends
Reconciliation of profit after income tax to
net cash from operating activities
Cash and bank deposits
Note 9.
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.
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
Issued capital
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Annual Report 2023 | Nick Scali Limited
Historical Performance
Revenue ($m)
Net profit after tax ($m)
101.1
84.2
74.9
441.0
507.7
373.0
268.0
262.5
42.1
42.1
2019
2020
2021
2022
2023
2019
2020
2021
2022
2023
Showrooms
Dividends (cents per share)
108
107
75.0
70.0
65.0
58
57
61
47.5
45.0
2019
2020
2021
2022
2023
2019
2020
2021
2022
2023
4
Annual Report 2023 | Nick Scali Limited Chairman and Managing
Director’s Review
Overview
We are pleased to report that Nick Scali Limited had another successful
year, delivering record sales revenue and profit. The Company also
completed the full operational integration and synergy savings realisation
from the acquisition of Plush-Think Sofas Pty Ltd (‘Plush”), acquired in
November 2021.
Operating Performance
During the year, sales revenue increased by 15.1% to $507.7 million, with
the Company benefiting from both increased deliveries, as the aging of
the order bank reduced, with lead times returning to pre Covid levels
following supply chain delays in the second half of the prior year. As well
as the inclusion of Plush revenue for a full twelve months. The Company
records revenue on delivery of furniture to the customer.
Gross margin increased by 250 basis points to 63.5%, due to lower freight
costs and the achievement of supply chain synergies following the
acquisition of Plush. Plush gross margin in the year improved to 62.7%
from 54.8% in the prior year.
Operating expenses in the current year include twelve months of costs
for Plush and additional logistics expenses of $4 million to support peak
delivery volumes. The additional logistics expenses are not expected to
recur. Generally operating expenses increase with inflation and due to
growth in the store network.
Net profit after tax for the year was $101.1 million.
The Company generated cash of $89.8 million from operating activities,
including operating lease payments and interest payments, an increase
of 12.5% from the prior year.
Expenditure on property included $7.8 million to purchase land on
which a new Queensland distribution centre will be constructed next
year to support the increased store network in Queensland. Other capital
expenditure, which includes store refurbishment and new store fit outs,
was $5.1 million in the year.
$60.8 million was returned to shareholders during the year by way of
payment of the final FY22 and interim FY23 dividends.
Cash and bank deposits at the end of the year were $89.3 million,
increasing $14.7 million from the end of the prior year. In August 2023
the Company repaid a further $20 million on the corporate debt used to
partially fund the Plush acquisition. After the August 2023 repayment the
outstanding balance on this debt is $28 million compared to the original
$65 million at the time of acquisition in November 2021. It is our intent to
complete full repayment of the corporate acquisition debt.
Store network
During the year, two new Nick Scali Furniture showrooms were opened
in Helensvale, Queensland and Shepperton, Victoria. One new Plush
showroom was opened in Capalaba, Queensland.
Six Plush showrooms were refurbished to reflect a new concept launched
in December 2022 that incorporates a significantly improved showroom
look and feel and, new visual merchandising guidelines to support
consistent ranging of product across Plush showrooms. This programme
of refurbishment of Plush showrooms will continue in the next year.
As part of the on-going optimisation of the acquired Plush store network,
three showrooms, where the store size or location were below our targets
for a Plush showroom, closed in the year.
The Company had a combined store network of 107 stores at the end of
June 2023.
Based on demographic data and proximity to existing showrooms, we
have identified target locations for Plush to operate a long-term store
network of between 90 and 100 stores, and Nick Scali a store network
of up to 86 stores. Timing of showroom roll out is dependent on site
availability and commercial terms.
We expect to open three new Plush showrooms and one new Nick Scali
showroom in the first half of the next year.
In addition to its significant lease portfolio, the Company currently has
eleven owned properties in Australia, with nine Nick Scali showrooms
operating out of owned property.
Alongside the store networks, the Company has continued to enhance
the eCommerce experience in Nick Scali online. Nick Scali online written
sales orders in the second half of the year were up 14.5% on the second
half of the prior year. For the first half of the year online written sales
orders were down 27.7% as the online written sales orders for the first half
of the prior year benefitted from the temporary showroom closures due
to Covid 19 lockdowns.
Outlook
The Company’s performance is supported by long-term relationships
with world leading suppliers and a disciplined focus on operating cost,
together with a strong cashflow generation and financial position.
This provides the platform to execute long term strategies, including
expanding and improving the store networks, for shareholder value
creation.
The Company’s focus is to maintain and increase market share, continue
offering high quality product at good value while maintaining gross
margin and drive retail staff closure of sales opportunities.
Dividends
On 11 August 2023, the Directors declared a fully franked final dividend of
35.0 cents per share, bringing the total dividend for the year to 75.0 cents
per share. This represents a payout ratio of 60%.
The final dividend has a record date of 27 September 2023 and will be
paid on 18 October 2023.
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. 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, suppliers, and shareholders whose continuing support
underpins the performance of the Company.
5
Annual Report 2023 | 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 2023.
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
Kathy Parsons (appointed 1 January 2023)
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 2022: 35.0 cents (2021: 25.0 cents)
Interim franked dividend for 30 June 2023: 40.0 cents (2022: 35.0 cents)
2023
$’000
28,350
32,400
60,750
2022
$’000
20,250
28,350
48,600
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 18 October 2023 out of retained profits at 30 June 2023.
Operating and financial review
Nick Scali Limited is a furniture retailer operating in Australia and New Zealand.
Group operating results
Revenue
Gross Margin %
Net profit after tax (NPAT)
Earnings per share (EPS)(cents)
2023
$’000
507,723
63.5
101,082
124.8
2022
$’000
440,957
61.0
74,922
92.5
% Change
15.1%
34.9%
34.9%
Revenue
The Group records revenue on delivery of furniture to the customer. Revenue for the year was favourably impacted by increased deliveries as the
aging of the order bank reduced with lead times returning to pre Covid following the resolution of global supply chain delays in the second half of
the prior year. The current year also includes twelve months of revenue for Plush-Think Sofas Pty Ltd (‘Plush’), which was acquired 1 November 2021.
Gross margin
Gross margin improved 250 basis points primarily due both to the realisation of supply chain synergies for the acquired Plush business and decreases
in the cost of international freight.
Operating expenses
Operating expenses include twelve months of costs for the Plush business acquired in November 2021. Additional logistics expenses of $4m in the
current year to support peak volumes and are not expected to recur. Sales commission expense included in employment expenses also increased
in line with the higher revenue. Expenses in the prior year included acquisition costs which did not recur in the current year.
Generally operating expenses increased with inflation and due to growth in the store network. Net profit after tax was 19.7% of revenue in the
current year versus 17.0% in the prior year. Prior year underlying net profit after tax (after excluding Plush acquisition costs) was 18.2% of prior year
revenue.
Net profit after tax of $101,082,000 was 34.9% higher than net profit after tax in the prior year and 26.1% higher than underlying net profit after tax
in the prior year after excluding Plush acquisition and restructuring costs.
6
Annual Report 2023 | Nick Scali Limited
Directors’ Report (continued)
Cash flow
Climate change
The Group maintained a strong working capital position throughout
The Company has assessed that climate related risks are not likely
the year. Cash and bank deposits increased $14,631,000 in the year
to have a significant impact on the business. The Group recognises
to $89,251,000 at 30 June 2023. Total borrowings of $91,687,000
the severity of the potential global impacts of climate change and
includes $43,687,000 of debt secured on the portfolio of owned
that expectations of customers, governments, employees, and other
properties at lower than 50% loan to value. Ownership of property
stakeholders regarding the Group’s ESG profile continue to evolve.
is a long-term strategy of the Company which secures key locations
The Group will continue to develop policies and procedures reflecting
out of which the Company trades, offsets rent and rent increases
these expectations.
which would otherwise be paid on a leased basis and over time
provides growth in asset value. Of the $65,000,000 facility taken out
in November 2021 to partially fund the Plush acquisition, $48,000,000
remained outstanding at 30 June 2023 and a further $20,000,000 was
repaid in August 2023.
Showroom network
Outlook
The Company’s performance is supported by long-term relationships
with world leading suppliers and a disciplined focus on operating cost,
together with a strong cash flow generation and financial position.
This provides the platform to execute long term strategies, including
expanding and
improving the store networks, for shareholder
Australia
New Zealand
value creation.
Nick Scali Furniture (No.)
Plush (No.)
Total (No.)
59
43
102
5
–
5
During the year, Nick Scali Furniture showrooms were opened at
Short term changes in housing turnover and consumer confidence
in the higher interest rate environment is likely to adversely impact
customer demand. The Company’s focus is to maintain and increase
market share, continue offering high quality product at good value
while maintaining gross margin and drive retail staff closure of sales
Helensvale, Queensland and Shepparton, Victoria. Under the Plush
opportunities.
brand a store was opened at Capalaba, Queensland and three stores
were closed at Penrith, New South Wales, South Wharf, Victoria and
Trading was volatile during the second half however June was a strong
finish to FY23 with group written sales orders of $51.5m up 4.5% on
Midland, Western Australia. This is in line with part of the Company’s
strategy to standardise and optimise the acquired Plush network
June 2022.
through closure of certain acquired stores and replacement with new
July 2023 orders of $39.7m were down 8.1% cycling off a strong
stores with improved locations and format.
July 2022.
The Company is investing to improve the performance of the acquired
Plush store network with a new more appealing brand image and
improved merchandising layout. The refurbishment of the Plush
showrooms commenced with 7 stores complete at 30 June 2023. This
program will continue throughout 2024.
People
The Group has a strong focus on attracting, engaging, developing,
and retaining top talent to ensure it remains a desirable employer 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 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.
Significant changes in the state of affairs
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
On 1 August 2023 the company made a loan repayment on the
corporate debt facility of $20million reducing the remaining
corporate debt to $28million. This repayment is made in advance of
the required payment schedule. The company declared a dividend on
11 August 2023. No other matter or circumstance has arisen since 30
June 2023 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 2023 | Nick Scali Limited
Directors’ Report (continued)
Information on directors
Name:
John Ingram
Title:
Independent Non-Executive Chair
Qualifications:
AM, FAICD
Experience and expertise:
John was appointed to the Board as non-executive Chair in April
2004, and was formerly Managing Director of Crane Group Limited.
Other current directorships: Non-executive Chair of Peter Warren
Automotive Holdings Limited (ASX: PWR).
Former directorships (last three years): Nil.
Special responsibilities: Member of the Audit and Risk Committee.
Name:
Title:
William (Bill) Koeck
Independent Non-Executive Director
Qualifications:
LLB, LLM(Hons), Post Graduate Applied
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. For over 20 years, Bill has been a part
time lecturer in corporate and securities law in the Masters of Law
course at the University of Sydney. Bill is a Member of the Federal
Member of the Remuneration and Human Resources Committee.
Governments Takeovers Panel.
Interests in shares:
385,000.
Name:
Title:
Carole Molyneux
Independent Non-Executive Director
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: Chair of the Remuneration and Human
Resources Committee.
Member of the Audit and Risk Committee.
Interests in shares:
25,000.
Name:
Title:
Stephen Goddard
Independent Non-Executive Director
Qualifications:
BSc (Hons), MSc
Experience and expertise:
Stephen was appointed to the Board in March 2018. Stephen is an
experienced retailer having held a broad range of senior executive
positions in the industry. These include Finance Director and
Operations Director for David Jones, founding Managing Director of
Officeworks, and various senior management roles with Myer.
Other current directorships: Non-Executive Chair and Chair
of Remuneration and Nomination Committee of JB Hifi Limited
(ASX: JBH).
Non-Executive Director and Chair of the Audit and Risk Committee of
Accent Group Limited (ASX: AX1).
Former directorships (last three years): Non-Executive Director
and Chair of the Audit and Risk Committee of GWA Group Limited
(ASX: GWA).
Special responsibilities: Chair of the Audit and Risk Committee.
Member of the Remuneration and Human Resources Committee.
Interests in shares:
6,000.
Other current directorships: Non-Executive Deputy Chair and
lead Independent Director, Member of Audit Risk and Governance
Committee and Chair 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.
Name:
Title:
Kathy Parsons
Independent Non-Executive Director
Qualifications:
BCom, CA
Experience and expertise:
Kathy was appointed to the Board on 1 January 2023 and brings a
wealth of experience in accounting, finance, governance and risk
management. Formerly she was an assurance partner at Ernst &
Young with deep international experience working in Australia, the
USA and the UK in a broad range of industries including retail and real
estate. She was also part of the Oceania assurance leadership team
responsible for quality assurance and risk management. Kathy was the
signing partner on the audit of Nick Scali Limited from 2012 to 2018.
Other current directorships: Non-Executive Director and Chair of
the Audit Risk and Compliance Committee for McMillan Shakespeare
Ltd (ASX: MMS).
Non-Executive Director and Chair of the Audit and Risk Committee
for Shape Australia Corp Ltd (ASX: SHA).
Former directorships (last three years): Non-Executive Director
and Chair of the Audit Committee for Tassal Group Limited (ASX: TGR).
Special responsibilities: Member of the Remuneration and Human
Resources Committee.
Member of the Audit and Risk Committee.
Interests in shares:
13,500.
Name:
Title:
Anthony Scali
Managing Director
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.
Special responsibilities: Nil.
Interests in shares:
11,039,474.
8
Annual Report 2023 | Nick Scali Limited
Directors’ Report (continued)
Other current directorships included above are current directorships
for listed entities only and exclude directorships of all other types of
entities, unless otherwise stated.
Former directorships (last 3 years) included above are directorships
held in the last three years for listed entities only and exclude
directorships of all other types of entities, unless otherwise stated.
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 until 5 October
2022 was Christopher Malley. He is a current member of the
Institute of Chartered Accountants in England and Wales.
The Company Secretary and Chief Financial Officer since 6 October
2022 is Sheila Lines. Sheila is currently a fellow of the Institute of
Chartered Accountants in England and Wales and a member of the
Chartered Accountant Australia & New Zealand. Sheila has over 25
years of experience at an executive level, most recently as Chief
Financial Officer at oOh!media Limited.
Meetings of directors
The numbers of meetings of the Board and of each Board sub-committee held during the year ended 30 June 2023, and the numbers of
meetings attended by each director or sub-committee member, were:
John Ingram
Stephen Goddard
William Koeck
Directors’
Meetings
Remuneration and Human
Resources Committee Meetings
Held
Attended
Held
Attended
10
10
10
10
10
10
1
1
1
1
1
1
Audit and Risk
Committee Meetings
Attended
Held
4
4
4
4
4
4
10
Carole Molyneux
Kathy Parsons2
Anthony Scali1
–
1Anthony 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
2 Kathy Parsons was appointed as a director on 1 January 2023.
10
10
10
1
–
–
–
2
4
1
5
1
1
5
2
4
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 2023 the key management personnel (KMPs) of the Group consisted of the following directors:
John Ingram
– Non-Executive Chair
Stephen Goddard
– Non-Executive Director
William Koeck
– Non-Executive Director
Carole Molyneux
– Non-Executive Director
Kathy Parsons
– Non-Executive Director (appointed on 1 January 2023)
Anthony Scali
– Managing Director & Chief Executive Officer
And the following executives:
Sheila Lines – Chief Financial Officer & Company Secretary (appointed on 6 October 2022)
Christopher Malley – Chief Financial Officer & Company Secretary (resigned on 5 October 2022)
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 earnings per share (EPS).
9
Annual Report 2023 | 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 senior executives reporting to the Managing
Directors & Chief Executive Officer.
•
recommending to the Board any discretionary component of short and long-term incentives for the Managing Director & Chief Executive Officer.
• 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 once 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
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
remuneration and they are not entitled to participate in the Executive Performance Rights Plan.
Non-executive Chair and directors’ fees in place at 30 June 2023 and 30 June 2022 were as follows:
Base fee for Non-Executive Chair
Base fee for Non-Executive Director
Additional fee for Audit and Risk Committee Chair
Additional fee for Audit and Risk Committee Member
Additional fee for Remuneration and Human Resources Committee Chair
Additional fee for Remuneration and Human Resources Committee Member
2023
$
200,000
100,000
20,000
5,000
10,000
3,000
2022
$
200,000
100,000
20,000
5,000
10,000
3,000
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 reporting to the Managing Director and Chief Executive Officer having regard to the nature
of each role, the experience of the individual employee and the performance of the individual. Remuneration for the Managing Director and
Chief Executive Officer is approved by the Board. External consultants are engaged as appropriate and market information is used to benchmark
executive remuneration. During the year ended 30 June 2023 no remuneration recommendations (as defined in the Corporations Act 2001 (Cth)
were received.
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
Annual base salary
including superannuation
Notice of termination
by Company
Notice of termination by
Employee
Anthony Scali
Managing Director &
7 April 2004
$750,000
12 months
6 months
Chief Executive Officer
Sheila Lines
Chief Financial Officer &
6 October 2022
$550,000
6 months
6 months
Company Secretary
10
Annual Report 2023 | 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
2023 financial year were:
Fixed Remuneration
Base Salary
Variable Remuneration
Short-term Incentive
Long-term Incentive
Managing Director & Chief Executive Officer
Chief Financial Officer
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, 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 Board approves changes to the fixed remuneration of the Managing Director and Chief Executive Officer.
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 and other senior executives 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.
The maximum available STI for executives for the financial year is determined by financial targets established by the Board at the beginning of
each financial year. A sliding scale is applied pro rata from 40% of maximum available STI at 95% of financial target to 100% of maximum available
STI at 110% of financial target. Below 95% of financial target set by the Board no STI is awarded for the financial year.
Up to 100% of the maximum available STI determined for the financial year by application of the financial target set by the Board may also be
subject to achievement of individual Non-financial KPIs. The Board at its discretion determines the weighting of non-financial KPIs for each
financial year for the Managing Director and Chief Executive Officer. The Remuneration and HR committee determines the weighting of non-
financial KPIs for each year for executives reporting to the Managing Director and Chief Executive Officer.
STIs awarded 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 following table shows the STI cash bonus target and the amount achieved for each KMP in the years ended 30 June 2023 and 30 June 2022:
Year ended 30 June 2023
Targeted STI Entitlement and KPIs
Anthony Scali
Sheila Lines1
Total $
750,000
202,671
Financial
KPIs %
100%
100%
Non Financial
KPIs %
–
–
Total $
750,000
202,671
STI Achieved and KPIs
Financial
KPIs %
Non Financial
KPIs %
750,000
202,671
–
–
1 Target is pro-rated for 2023 year to period of service commencing 6 October 2022. Christopher Malley who resigned as Chief Financial Officer & Company Secretary
on 5 October 2022 was not entitled to an STI for the year ended 30 June 2023.
On final assessment of KPI achievement for the 2022 financial year, STI payments were reduced from STI amounts originally estimated in the 2022
Annual Remuneration Report. Final paid STI outcomes for 2022 are shown below.
Year ended 30 June 2022
Anthony Scali
Christopher Malley1
John Austin2
Estimated in 2022 report
$
750,000
150,000
150,000
Final Paid
$
647,250
64,718
129,450
1 Christopher Malley resigned as the Chief Financial Officer and Company Secretary on 5 October 2022.
2 The Board determined from 1 July 2022 that the KMP are the Directors, Managing Director & Chief Executive Officer, and the Chief Financial Officer & Company
Secretary. John Austin is the Chief Operating Officer.
11
Annual Report 2023 | Nick Scali Limited
Directors’ Report (continued)
Remuneration Report – Audited (continued)
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. The Board has the
discretion to adjust the EPS base year to reflect specific trading conditions which are not expected to re-occur in the measurement period. For
performance rights issued in FY22 the Board adjusted the EPS base year to the average of FY20 and FY21 EPS, in recognition of the 100% increase
in EPS in FY21 resulting from the unusually high demand for home furniture during the COVID lockdowns. For performance rights issued in FY23
the EPS base year was not adjusted.
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%
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 2023, 12,000 such rights were awarded to Sheila Lines
on the commencement of her employment. 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 performance rights entitlement of executives considered KMPs is calculated as a percentage of fixed annual remuneration for the years
ended 30 June 2023 and 30 June 2022 as follows:
Year ended 30 June 2023
Years of Service
Targeted LTI Entitlement
LTI Awarded
Anthony Scali1
Sheila Lines2
42
9 months
0%
0%
0%
0%
1 Anthony Scali is aligned to creation of shareholder value over the long term as the beneficial holder of 13.62% of the issued share capital in the Company. Anthony
Scali is not invited by the Board to participate in the EPRP.
2 Sheila Lines had not met the employment tenure criteria for EPRP participation in the year ended 30 June 2023.
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%
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.
12
Annual Report 2023 | Nick Scali Limited Directors’ Report (continued)
Remuneration Report – Audited (continued)
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
FY23/25
FY22/24
FY21/23
6 Oct 2022
20 Sep 2021
14 Sep 2020
Vesting and
exercisable date
Oct 20253
Aug 20242,3
Aug 20232
Expiry date
Exercise price ($)
Fair value per right
at grant date ($)
31 Aug 2025
30 Jun 2026
30 Jun 2025
0.00
0.00
0.00
7.73
9.87
6.61
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 performance 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.
3 The vesting and exercisable date for retention rights issued to Sheila Lines is after completion of continuous service from 6 October 2022 to
31 August 2025. The vesting and exercisable date for retention rights issued to John Austin is after completion of three years continuous service 1 July 2021 to 30
June 2024.
4.2.7 Performance rights holding
The table below sets out the balance of performance rights held by executives considered KMPs. The vesting of these rights are subject to the
achievement of the 3 year EPS target.
Anthony Scali
Sheila Lines
Christopher Malley1
Balance at
1 July 2022
–
–
58,377
Granted
Vested and
exercised
Forfeited
–
–
Balanc at
30 June 2023
–
–
–
–
23,810
29,093
5,474
–
–
–
1 Rights vested had a value of $222,271 when exercised. Performance rights forfeited on cessation of employment were granted: FY21 16,423
and FY22 12,669.
Anthony Scali
Christopher Malley
John Austin
4.2.8 Retention rights holding
Balance at
1 July 2021
–
45,708
–
Granted
–
12,669
12,669
Vested and
exercised
Forfeited
Balance at
30 June 2022
–
–
–
–
–
–
–
58,377
12,669
The table below sets out the balance of retention rights held by executives considered KMPs. The vesting of these rights are subject to the
completion of a service condition only.
Balance at 1 July 2022
Anthony Scali
Sheila Lines
Christopher Malley
–
–
–
Granted
–
12,000
–
Vested and exercised
Forfeited
Balance at 30 June 2023
–
–
–
–
–
–
–
12,000
–
Balance at 1 July 2021
Granted
Vested and exercised
Forfeited
Balance at 30 June 2022
–
–
–
–
–
60,000
–
–
–
–
–
–
–
–
60,000
Anthony Scali
Christopher Malley
John Austin
4.3 Group performance
The table below sets out the financial performance of the Group over the past five years:
Revenue ($m)
Net profit after tax ($m)
Earnings per share (Cents)
Ordinary dividends paid per share (Cents)
Share price at 30 June ($)
2019
2020
268.0
262.5
42.1
52.0
45.0
6.26
42.1
51.9
47.5
6.48
2021
373.0
84.2
104.0
65.0
11.72
2022
441.0
74.9
92.5
60.0
8.26
2023
CAGR (%)
507.7
101.1
124.8
75.0
9.11
17.3
24.5
24.5
13.6
9.8
13
Annual Report 2023 | Nick Scali Limited
Directors’ Report (continued)
Remuneration Report – Audited (continued)
4.4 Remuneration outcomes
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 2023 and 30 June 2022 respectively:
Year ended 30 June 2023
John Ingram
William Koeck
Carole Molyneux
Stephen Goddard
Kathy Parsons1
Year ended 30 June 2022
John Ingram
William Koeck
Carole Molyneux
Stephen Goddard
Short-term benefits
Fees
Post-employment benefits
Superannuation
180,996
97,738
104,072
111,312
48,869
542,987
181,818
98,182
103,409
110,682
494,091
19,004
10,262
10,928
11,688
5,131
57,013
18,182
9,818
10,341
11,068
49,409
Total
200,000
108,000
115,000
123,000
54,000
600,000
200,000
108,000
113,750
121,750
543,500
1 Kathy Parsons was appointed as a Non-executive Director on 1 January 2023.
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 2023 and 30 June 2022 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 2023
Anthony Scali
Sheila Lines1
Christopher Malley1
Year ended 30 June 2022
Anthony Scali2
Christopher Malley2
John Austin2
726,427
391,875
84,525
1,202,827
726,437
276,423
305,548
1,308,408
750,000
202,671
–
952,671
647,250
64,718
129,450
841,418
23,567
20,625
7,782
51,974
23,567
23,567
23,567
70,701
12,083
–
–
–
1,512,077
24,458
(96,431)
639,629
(4,124)
12,083
(71,973)
2,147,582
11,243
–
–
–
1,408,497
145,473
238,985
510,181
697,550
11,243
384,458
2,616,228
1 Sheila Lines was appointed on 6 October 2022. Christopher Malley ceased to be a KMP on 5 October 2022. Amounts represent the payments to Chris Malley relating
to the period in FY23 that he was KMP. Share based payment outcome for Christopher Malley includes reversal of prior period reported expense for performance
rights forfeited on resignation in the current year.
2 STI reflects reduced final paid amounts. Refer to section 4.2.4 in this report.
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
Kathy Parsons1
Anthony Scali
Balance at
1 July 2022
Received as part
of remunerations
Purchases
Disposals
Balance at
30 June 2023
Ordinary shares
Ordinary shares
Ordinary shares
Ordinary shares
Ordinary shares
385,000
16,300
20,000
6,000
–
11,039,474
11,466,774
–
–
–
–
–
–
–
–
–
5,000
–
–
–
5,000
–
–
–
–
–
–
–
385,000
16,300
25,000
6,000
13,500
11,039,474
11,485,274
1 Kathy Parsons had an existing beneficial interest prior to appointment 1 January 2023 of 13,500 Shares of the Company.
This concludes the remuneration report, which has been audited.
14
Annual Report 2023 | Nick Scali Limited
Directors’ Report (continued)
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
Kathy Parsons who was appointed as Director on 1 January 2023 is a former partner of Ernst & Young. She was the signing partner on the audit
of Nick Scali Limited from 2012 until 2018.
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 2023. 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.
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 2023, Ernst & Young Australia performed tax review services and provided tax compliance services. Details of the
amount paid to the auditor for non-audit services are set out below.
Tax compliance services
Tax review services
2023
$’000
57
47
104
15
Annual Report 2023 | Nick Scali Limited
Directors’ Report (continued)
Non-audit services (continued)
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 auditor’s 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 19 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
Chair
11 August 2023
Sydney
Anthony Scali
Managing Director
16
Annual Report 2023 | Nick Scali Limited
Cobble Swivel Armchair in tomato Pure fabric.
Kendall 3 Seat in 100% tan Volcano leather.
Annual Report 2023 | Nick Scali Limited
17
Blox Queen Bed Frame in Australian Oak.
18
Annual Report 2023 | 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 2023, 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
11 August 2023
A member firm of Ernst & Young Global Limited
Liability limited by a scheme approved under Professional Standards Legislation
19
Annual Report 2023 | Nick Scali Limited Denver 3 Seat + Chaise in 100% tan Dakota leather.
20
Annual Report 2023 | Nick Scali Limited
Annual Report 2023 | Nick Scali Limited
21
Consolidated statement of comprehensive income
For the year ended 30 June 2023
Revenue from contracts with customers
Cost of goods sold
Gross profit
Other income
Expenses
Marketing expenses
Employment expenses
General and administration expenses
Property expenses
Logistics expenses
Acquisition expenses
Depreciation and amortisation
Finance costs
Profit before income tax expense
Income tax expense
Note
3
3
4
4
32
5
2023
$’000
507,723
(185,313)
2022
$’000
440,957
(171,980)
322,410
268,977
4,661
1,554
(24,125)
(71,573)
(17,248)
(8,568)
(6,039)
–
(42,762)
(13,243)
143,513
(42,431)
(21,828)
(62,294)
(13,032)
(7,750)
(3,522)
(3,324)
(41,555)
(9,270)
107,956
(33,034)
Profit after income tax expense for the year attributable to the owners of
Nick Scali Limited
101,082
74,922
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
Basic earnings per share
Diluted earnings per share
(1,252)
84
(1,168)
647
(201)
446
99,914
75,368
NOTE
6
6
2023
CENTS
124.8
124.8
2022
CENTS
92.5
92.5
The above consolidated statement of comprehensive income should be read in conjunction with the accompanying notes
22
Annual Report 2023 | Nick Scali Limited
Consolidated statement of financial position
As at 30 June 2023
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
9
10
11
12
13
13
14
5
15
16
17
14
18
19
16
14
18
5
19
20
21
2023
$’000
89,251
1,763
54,555
504
3,303
2022
$’000
74,620
3,550
70,525
3,091
3,040
149,376
154,826
104,482
14,836
203,680
5,493
129,773
458,264
97,385
15,140
215,362
4,257
129,425
461,569
607,640
616,395
2,300
22,728
35,563
62,884
5,560
5,325
20,100
34,979
36,200
85,074
7,665
6,260
134,360
190,278
89,387
190,915
2,274
9,165
1,626
293,367
71,562
201,736
1,767
8,130
1,994
285,189
427,727
475,467
179,913
140,928
3,364
191
176,358
179,913
3,364
1,538
136,026
140,928
The above consolidated statement of financial position should be read in conjunction with the accompanying notes
23
Annual Report 2023 | Nick Scali Limited
Consolidated statement of changes in equity
For the year ended 30 June 2023
Issued
capital
$’000
Equity
benefits
reserve
$’000
Capital
profits
reserve
$’000
Cash flow
hedge
reserve
$’000
Foreign
exchange
reserve
$’000
Retained
profits
reserve
$’000
Total
equity
$’000
Balance at 1 July 2021
3,364
(227)
78
1,098
Profit after income tax 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
–
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
Balance at 1 July 2022
3,364
(93)
78
1,745
(192)
136,026
140,928
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)
–
–
–
–
–
–
–
–
(179)
–
–
–
–
–
–
–
–
101,082
101,082
(1,252)
84
–
(1,168)
(1,252)
84
101,082
99,914
–
–
–
–
–
(179)
(60,750)
(60,750)
Balance at 30 June 2023
3,364
(272)
78
493
(108)
176,358
179,913
The above consolidated statement of changes in equity should be read in conjunction with the accompanying notes
24
Annual Report 2023 | Nick Scali Limited
Consolidated statement of cash flows
For the year ended 30 June 2023
Cash flows from operating activities
Receipts from customers
Payments to suppliers and employees
Interest received
Income tax payments
Note
2023
$’000
2022
$’000
539,733
(360,255)
500,023
(336,821)
179,478
163,202
2,460
(44,038)
92
(40,955)
Net cash from operating activities
8
137,900
122,339
Cash flows from investing activities
Purchase of property, plant and equipment
Purchase of intangible assets
Acquisition of subsidiary, net of cash acquired
Net cash from investing activities
Cash flows from financing activities
Payment of dividends on ordinary shares
Proceeds from borrowings
Repayment of borrowings
Investment in term deposits
Maturity of 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
32
7
14
14
(12,280)
(608)
–
(18,422)
(557)
(102,522)
(12,888)
(121,501)
(60,750)
7,025
(7,000)
–
40,000
(36,435)
(9,242)
(3,979)
(48,600)
72,500
(14,500)
(40,000)
–
(33,274)
(8,124)
(1,112)
(70,381)
(73,110)
54,631
34,620
(72,272)
106,892
Cash and cash equivalents at the end of the financial year
9
89,251
34,620
The above consolidated statement of cash flows should be read in conjunction with the accompanying notes
25
Annual Report 2023 | Nick Scali Limited
Notes to the consolidated financial statements
For year ended 30 June 2023
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 and brands
The Company determines whether goodwill and brands are impaired
on an annual basis. This requires determination of CGU’s and
estimation of the recoverable amount of the cash-generating unit to
which the goodwill and brand is allocated. The assumptions used in
this estimation of recoverable amount and the carrying amount of
goodwill and brands are discussed at Note 15 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
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.
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 11 August 2023.
The consolidated financial statements have been prepared on a going
concern basis, which contemplates the continuity of normal business
activities and realisation of asset and settlement of liabilities in the
ordinary course of business.
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 2023.
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 2022.
26
Annual Report 2023 | Nick Scali Limited Notes to the consolidated financial statements for year ended 30 June 2023 (continued)
Note 2. Segment information
The Company has identified the Managing Director & Chief Executive Officer 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
Rental income
Interest income
Net gain on disposal of right-of-use asset and remeasurement of lease liability
Sundry income
2023
$’000
2022
$’000
507,723
440,957
1,029
2,460
362
810
4,661
916
92
29
517
1,554
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
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
2023
$’000
2022
$’000
48,701
–
4,716
466
768
(306)
41,533
(67)
4,374
625
1,588
(847)
27
Annual Report 2023 | Nick Scali Limited
Notes to the consolidated financial statements for year ended 30 June 2023 (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 non assessable items
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
Cash flow hedge (Note 23)
Inventory provision
Other
Reflected in the statement of financial position as follows:
Deferred tax assets
Deferred tax liabilities
Deferred tax liabilities, net
Recognition and measurement – Income tax
2023
$’000
41,643
200
588
42,431
2022
$’000
33,138
(201)
97
33,034
143,513
107,956
43,054
32,387
200
(40)
(33)
(574)
–
(176)
(201)
(103)
(106)
–
991
66
42,431
33,034
(60,712)
67,534
(11,400)
(1,612)
(1,428)
1,660
(153)
907
1,532
(3,672)
5,493
(9,165)
(3,672)
(64,116)
70,899
(11,400)
(1,612)
(77)
2,034
(927)
215
1,111
(3,873)
4,257
(8,130)
(3,873)
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, reflecting the difference 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.
28
Annual Report 2023 | Nick Scali Limited
Notes to the consolidated financial statements for year ended 30 June 2023 (continued)
Note 6. Earnings per share
Profit after income tax attributable to the owners of Nick Scali Limited
2023
$’000
2022
$’000
101,082
74,922
Number
Number
Weighted average number of ordinary shares used in basic earnings per share
81,000,000
81,000,000
Weighted average number of ordinary shares used in 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
124.8
124.8
Cents
92.5
92.5
Basic earnings per share (EPS) is calculated as net profit attributable to members, divided by the weighted average number of ordinary shares.
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 2022: 35.0 cents (2021: 25.0 cents)
Interim fully franked dividend for 30 June 2023: 40.0 cents (2022: 35.0 cents)
2023
$’000
2022
$’000
28,350
32,400
60,750
20,250
28,350
48,600
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 18 October 2023 out of retained profits at 30 June 2023.
Franking credit
Franking credits are available to the Company as follows:
Franking credits available at the reporting date based on a tax rate of 30%
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%
Impact on franking account of dividends proposed after the reporting date but not
recognised as a liability
Franking credits available for future reporting periods based on a tax rate of 30%
Tax rate at which paid dividends have been franked
Tax rate at which dividends declared and unpaid will be franked
74,576
(2,419)
72,157
(12,150)
60,007
2023
%
30.0
30.0
62,475
3,688
66,163
(12,150)
54,013
2022
%
30.0
30.0
29
Annual Report 2023 | Nick Scali Limited
Notes to the consolidated financial statements for year ended 30 June 2023 (continued)
Note 8. Reconciliation of profit after income tax to net cash from operating activities
Profit after income tax expense for the year
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
Changes 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
2023
$’000
2022
$’000
101,082
74,922
–
13,221
(362)
42,762
466
282
9,249
(29)
41,555
625
(577)
(352)
1,787
15,970
(201)
(263)
2,587
(1,252)
(12,251)
(21,683)
(2,105)
(1,303)
22
137,900
2023
$’000
49,251
40,000
89,251
–
89,251
(1,426)
(14,034)
592
(162)
(1,671)
647
6,766
13,596
(7,923)
(230)
(68)
122,339
2022
$’000
34,620
–
34,620
40,000
74,620
Recognition and measurement – Cash and bank deposits
Cash and cash equivalents comprise cash at bank and on hand and short-term deposits with a maturity of three months or less. Deposits are
made for varying periods, depending on the immediate cash requirements of the Group. Deposits with a 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.
30
Annual Report 2023 | Nick Scali Limited
Notes to the consolidated financial statements for year ended 30 June 2023 (continued)
Note 10. Receivables
Trade debtors
Other debtors
2023
$’000
536
1,227
1,763
2022
$’000
1,823
1,727
3,550
During the year ended 30 June 2023, $287,000 (2022: $40,000) 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 the lower of cost or net realisable value
Stock in transit – at cost
2023
$’000
41,702
12,853
54,555
2022
$’000
47,997
22,528
70,525
During the year ended 30 June 2023, $2,320,000 (2022: $292,000 reduction) was recognised as an expense 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.
Note 12. Other financial assets
Derivative hedge receivable
Foreign exchange forward contracts
2023
$’000
504
504
2022
$’000
3,091
3,091
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 2023 totalled $USD44,848,000 which covers between 50% and 100% of highly probably purchases for the six
months to 31 December 2023 (30 June 2022: $USD32,060,000). The average rate of foreign exchange forward contracts held on 30 June 2023
was $USD0.67 (30 June 2022: $USD0.74).
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 income. 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.
31
Annual Report 2023 | Nick Scali Limited
Notes to the consolidated financial statements for year ended 30 June 2023 (continued)
Note 13. Property, plant and equipment
Year ended 30 June 2023
At cost
Less, accumulated depreciation
Year ended 30 June 2022
At cost
Less, accumulated depreciation
Reconciliations
Land &
buildings
$’000
Leasehold
improvements
$’000
Fixtures &
fittings
$’000
Motor
vehicles
$’000
Office
equipment
$’000
Total
$’000
113,345
(8,863)
104,482
104,824
(7,439)
97,385
24,927
(15,475)
9,452
22,318
(13,282)
9,036
2,300
(1,995)
305
2,292
(1,907)
385
921
(691)
230
921
(584)
337
15,888
(11,039)
157,381
(38,063)
4,849
119,318
14,692
(9,310)
145,047
(32,522)
5,382
112,525
Reconciliation of the carrying amounts of property, plant and equipment at the beginning and end of the financial year:
Balance at 1 July 2021
Acquisitions (Note 32)
Additions
Disposals
Foreign currency translation
Depreciation expense
Balance at 30 June 2022
Additions
Disposals
Foreign currency translation
Depreciation expense
Balance at 30 June 2023
Land &
buildings
$’000
83,413
–
15,398
(164)
–
(1,262)
97,385
8,521
–
–
(1,424)
104,482
Leasehold
improvements
$’000
Fixtures &
fittings
$’000
Motor
vehicles
$’000
Office
equipment
$’000
9,972
2,245
1,267
(118)
(64)
(4,266)
9,036
2,575
(18)
47
(2,188)
9,452
195
286
6
–
(1)
(101)
385
15
–
(3)
(92)
305
328
36
85
–
(1)
(111)
337
–
–
–
(107)
230
Total
$’000
98,628
2,894
18,422
(282)
(77)
(7,060)
112,525
12,280
(18)
58
(5,527)
4,720
327
1,666
–
(11)
(1,320)
5,382
1,169
–
14
(1,716)
4,849
119,318
Land and buildings totalling $82.1m (2022: $67.5m) 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: 6 years
Office equipment (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.
32
Annual Report 2023 | Nick Scali Limited
Notes to the consolidated financial statements for year ended 30 June 2023 (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
Make good asset movement during the year
Depreciation
Foreign currency translation
2023
$’000
2022
$’000
35,563
190,915
226,478
237,936
3,489
26,988
–
9,242
(45,677)
(5,813)
313
226,478
350,295
(146,615)
203,680
215,362
3,489
26,988
–
–
(5,450)
(21)
(36,975)
287
203,680
36,200
201,736
237,936
193,318
6,742
11,484
62,172
8,124
(41,398)
(1,959)
(547)
237,936
344,184
(128,822)
215,362
170,904
6,742
11,484
62,172
251
(1,929)
18
(33,816)
(464)
215,362
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 2023. The undiscounted potential future payments
under options that are not considered reasonably certain to be exercised is $111,263,000 which includes those that have an exercise date within
the next five years of $49,320,000.
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 thirteen years dependent on the term of the lease and the likelihood of
the Company exercising any lease extension options in its favour.
33
Annual Report 2023 | Nick Scali Limited
Notes to the consolidated financial statements for year ended 30 June 2023 (continued)
Note 15. Intangibles
Year ended 30 June 2023
At cost
Less, accumulated amortisation
Year ended 30 June 2022
At cost
Less, accumulated amortisation
Goodwill
$’000
90,589
–
90,589
90,589
–
90,589
Brands
$’000
38,000
–
38,000
38,000
–
38,000
Reconciliations
Reconciliation of the carrying amounts of intangibles at the beginning and end of the financial year:
Website costs
$’000
2,325
(1,141)
1,184
1,721
(885)
836
Website costs
$’000
313
557
645
(679)
836
608
(260)
Total
$’000
130,914
(1,141)
129,773
130,310
(885)
129,425
Total
$’000
2,691
557
126,856
(679)
129,425
608
(260)
129,773
Goodwill
$’000
2,378
–
88,211
–
90,589
–
–
Brands
$’000
–
–
38,000
–
38,000
–
–
90,589
38,000
1,184
Balance at 1 July 2021
Additions
Acquisitions (Note 32)
Amortisation expense
Balance at 30 June 2022
Additions
Amortisation expense
Balance at 30 June 2023
No impairment losses have been recognised in the year ended 30 June 2023 (2022: $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.
Goodwill arising from business combination is allocated to the Group, being the group of CGUs that are expected to benefit from the synergies of
combination. This is the lowest level at which goodwill is monitored for internal management purposes.
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 2024 and
four-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 2024, adjusted where
appropriate for expected future changes in the Group’s international supply chain.
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% (2022: 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
10.9% (2022: 10.4%).
34
Annual Report 2023 | Nick Scali Limited
Notes to the consolidated financial statements for year ended 30 June 2023 (continued)
Note 15. Intangibles continued
At 30 June 2023, 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.
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
2023
$’000
2,300
89,387
91,687
91,662
7,025
(7,000)
91,687
2022
$’000
20,100
71,562
91,662
33,662
72,500
(14,500)
91,662
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 40 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
Trade creditors
2023
$’000
10,132
12,596
22,728
2022
$’000
17,516
17,463
34,979
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- 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.
35
Annual Report 2023 | Nick Scali Limited
Notes to the consolidated financial statements for year ended 30 June 2023 (continued)
Note 18. Deferred revenue
Customer deposits
Current accidental damage warranties
Current deferred revenue
Non-current accidental damage warranties
Non-current deferred revenue
2023
$’000
62,688
196
62,884
2,274
2,274
65,158
2022
$’000
84,740
334
85,074
1,767
1,767
86,841
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
2023
$’000
5,010
315
5,325
530
1,096
1,626
6,951
2022
$’000
6,088
172
6,260
698
1,296
1,994
8,254
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.
36
Annual Report 2023 | Nick Scali Limited
Notes to the consolidated financial statements for year ended 30 June 2023 (continued)
2023
No. of Shares
2022
No. of Shares
2023
$’000
2022
$’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 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 expense
Foreign currency translation differences
Balance at 30 June 2022
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 2023
Equity benefits reserve
(227)
–
(139)
(352)
625
–
(93)
–
(68)
(577)
466
–
(272)
78
–
–
–
–
–
78
–
–
–
–
–
78
2023
$’000
78
493
(108)
(272)
191
Cash flow
hedge
reserve
$’000
1,098
647
–
–
–
–
1,745
(1,252)
–
–
–
–
Foreign
exchange
reserve
$’000
9
–
–
–
–
(201)
(192)
–
–
–
–
84
493
(108)
2022
$’000
78
1,745
(192)
(93)
1,538
Total
$’000
958
647
(139)
(352)
625
(201)
1,538
(1,252)
(68)
(577)
466
84
191
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.
37
Annual Report 2023 | Nick Scali Limited
Notes to the consolidated financial statements for year ended 30 June 2023 (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
Bank guarantee facilities
Facilities unused at reporting date
Interchangeable facilities, including letters of credit and bank guarantees
Bank guarantee facilities
2023
$’000
2022
$’000
2,300
89,387
–
500
92,187
2,300
89,387
380
92,067
–
120
120
20,100
71,562
1,000
500
93,162
20,100
71,562
380
92,042
1,000
120
1,120
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 2023, the Company had trade payables of $3,172,000 (2022: $6,835,000) denominated in US dollars and stock in transit of
$12,853,000 (2022: $22,529,000) 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 2023 through to December 2023, 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.
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 2023, an unrealised loss of $1,252,000 (30 June 2022: an unrealised gain of $647,000) is recorded in other comprehensive income.
38
Annual Report 2023 | Nick Scali Limited
Notes to the consolidated financial statements for year ended 30 June 2023 (continued)
Note 23. Financial instruments (continued)
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.
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
2023
2022
Weighted
average
interest rate
%
4.43
–
4.87
4.66
Weighted
average
interest rate
%
0.20
3.65
2.04
1.26
Balance
$’000
89,251
–
(2,300)
(89,387)
(2,436)
Balance
$’000
34,816
40,000
(20,100)
(71,562)
(16,846)
A reasonably possible decrease (or increase) in the interest rate of 50 basis points would result in a decrease (or increase) of profit of $12,000
(2022: $84,000 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 credit worthy counterparties that are large Australian banks.
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.
39
Annual Report 2023 | Nick Scali Limited
Notes to the consolidated financial statements for year ended 30 June 2023 (continued)
Note 23. Financial instruments (continued)
Year ended 30 June 2023
Interest bearing
Bank loans
Lease liabilities
Non–interest bearing
Trade creditors
Other creditors
Current tax liabilities
Year ended 30 June 2022
Interest bearing
Bank loans
Lease liabilities
Non-interest bearing
Trade creditors
Other creditors
Current tax liabilities
Less than
3 months
$’000
–
11,823
10,132
12,596
5,560
40,111
20,143
11,374
17,516
17,465
7,665
74,163
3 to 12
months
$’000
2,359
32,267
–
–
–
1 to 5
years
$’000
90,303
87,913
–
–
–
Over 5
years
$’000
–
9,986
–
–
–
Remaining
maturities
$’000
92,662
141,989
10,132
12,596
5,560
34,626
178,216
9,986
262,939
–
31,973
74,913
95,076
–
–
–
–
–
–
–
8,974
–
–
–
95,056
147,397
17,516
17,465
7,665
31,973
169,989
8,974
285,099
Of the $65,000,000 facility taken out in November 2021 to partially fund the Plush acquisition, $48,000,000 remained outstanding at 30 June
2023 and a further $20,000,000 was repaid on 1 August 2023 reducing the remaining corporate debt to $28,000,000. This repayment is made
in advance of the required payment schedule. No other 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 $504,000 (2022: receivable of
$3,091,000). 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.
40
Annual Report 2023 | Nick Scali Limited
Notes to the consolidated financial statements for year ended 30 June 2023 (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 2023, and no contingent liabilities were identified at that date
(30 June 2022: 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
2023
$’000
16,013
531
100
50
16,694
2023
No.
2022
$’000
6,729
43
1,391
440
8,603
2022
No.
726
776
2023
$
2022
$
2,155,498
2,852,499
12,083
51,974
(71,973)
11,852
120,265
384,458
2,147,582
3,369,074
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 2023 (2022: Nil).
Loans to or from related parties
There were no loans to or from related parties on 30 June 2023 (2022: Nil).
41
Annual Report 2023 | Nick Scali Limited
Notes to the consolidated financial statements for year ended 30 June 2023 (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 2023 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
Retention rights granted
Share rights vested and exercised
Share rights forfeited
Outstanding share rights at the end of the year
2023
226,991
49,516
12,000
(61,508)
(29,092)
197,907
2022
146,459
48,914
60,000
(28,382)
–
226,991
The expense recognised in relation to employee share rights during the year was $466,000 (2022: $624,600).
Recognition and measurement – Share-based payments
Share-based payments are measured at the fair value of the rights at grant date and are expensed on a straight-line basis over the vesting period,
with a corresponding increase in equity, based on the Company’s estimate of the number of shares that will eventually vest, considering the
likelihood of employee turnover and the likelihood of non-market performance conditions being met.
The fair value of rights at grant date is valued under risk neutral conditions. Under these conditions the value of the right is equivalent to the share
price reduced by the present value of dividends payable on the shares until vesting. The present value of the dividends is deducted from the
share price because the right holder is not entitled to dividends until the rights are exercised. The valuation assumes that the rights are exercised
as they vest.
The key assumptions used for determining fair value at grant date are as follows:
Share price at grant date ($)
Share price at grant date retention rights ($)
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
42
2023
11.04
10.23
6.3
30.0
9.0
2023
$’000
239,336
255,298
494,634
94,211
220,813
315,024
179,610
2022
12.36
12.36
9.0
30.0
12.9
2022
$’000
234,965
258,789
493,754
150,509
211,277
361,786
131,968
Annual Report 2023 | Nick Scali Limited
Notes to the consolidated financial statements for year ended 30 June 2023 (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
2023
$’000
3,364
78
372
(272)
176,068
179,610
74,447
(1,252)
73,195
2022
$’000
3,364
78
1,721
(93)
126,898
131,968
66,778
446
67,224
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 2023 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
Nick Scali Employee Share Scheme Pty Limited
Plush-Think Sofas Pty Limited
New Zealand
Australia
Australia
Ordinary
Ordinary
Ordinary
2023
%
100.0
100.0
100.0
2022
%
100.0
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.
43
Annual Report 2023 | Nick Scali Limited
Notes to the consolidated financial statements for year ended 30 June 2023 (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
2023
$’000
Closed Group
2022
$’000
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 Bank Deposits
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
486,056
(177,330)
2,172
(120,053)
(39,021)
(10,285)
141,539
(41,875)
99,664
(1,252)
(1,252)
98,412
133,273
99,664
(60,750)
172,187
86,890
904
50,612
504
3,240
142,150
104,482
12,618
188,790
129,773
435,663
577,813
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
44
Annual Report 2023 | Nick Scali Limited
Notes to the consolidated financial statements for year ended 30 June 2023 (continued)
Note 31. Controlled entities (continued)
Closed Group
2023
$’000
Closed Group
2022
$’000
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
2,300
21,967
32,157
59,448
5,458
5,211
126,541
89,387
178,270
2,200
4,066
1,500
275,423
401,964
175,849
3,364
298
172,187
175,849
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
45
Annual Report 2023 | Nick Scali Limited
Notes to the consolidated financial statements for year ended 30 June 2023 (continued)
Note 32. Business combinations
On 1 November 2021 the Company acquired 100% of the issued share capital of Plush-Think Sofas Pty Ltd for $102,522,000. The acquisition
accounting for the Groups acquisition of Plush was finalised at 30 June 2022. This note remains in the annual report for comparative purposes.
The fair values of the identifiable assets and liabilities of Plush at the date of acquisition were as follows:
Value at Acquisition
30 June 22
$’000
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
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 at the date of acquisition.
Transaction costs
Transactions costs of $3,324,000 were 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 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.
46
Annual Report 2023 | Nick Scali Limited
Notes to the consolidated financial statements for year ended 30 June 2023 (continued)
Note 33. Significant events after the reporting period
On 1 August 2023 the company made a loan repayment on the corporate debt facility of $20million reducing the remaining corporate debt
to $28million. This repayment is made in advance of the required payment schedule. The company declared a dividend on 11 August 2023
(see Note 7). No other matter or circumstance has arisen since 30 June 2023 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
345,300
363,000
2023
$
2022
$
Other services
Due diligence services
Tax review
Tax compliance
–
46,975
56,689
448,964
142,621
–
46,095
551,716
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.
47
Annual Report 2023 | Nick Scali Limited
Notes to the consolidated financial statements for year ended 30 June 2023 (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.
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.
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 2023 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.
48
Annual Report 2023 | 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 2023 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
John Ingram
Chair
11 August 2023
Sydney
Anthony Scali
Managing Director
Francesca TV Entertainment Unit.
Annual Report 2023 | Nick Scali Limited
49
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 2023, 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 2023
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
50
Annual Report 2023 | Nick Scali Limited Independent Auditor’s Report to the Members of Nick Scali Limited (continued)
Inventory Valuation
Why significant
At 30 June 2023, the Group held $54.5 million in
inventories representing 9% of total assets.
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.
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.
There is also judgement involved 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.
How our audit addressed the key audit matter
Our audit procedures included the following:
- Assessed the application of the Group’s inventory costing
methodology, specifically in relation to freight and customs
duties, and whether this was consistent with the
requirements of Australian Accounting Standards.
- 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.
- Considered the related financial report disclosures.
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 2023 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.
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.
A member firm of Ernst & Young Global Limited
Liability limited by a scheme approved under Professional Standards Legislation
51
Annual Report 2023 | Nick Scali Limited Independent Auditor’s Report to the Members of Nick Scali Limited (continued)
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.
► 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.
A member firm of Ernst & Young Global Limited
Liability limited by a scheme approved under Professional Standards Legislation
52
Annual Report 2023 | Nick Scali Limited Independent Auditor’s Report to the Members of Nick Scali Limited (continued)
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 2023.
In our opinion, the Remuneration Report of Nick Scali Limited for the year ended 30 June 2023,
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
11 August 2023
A member firm of Ernst & Young Global Limited
Liability limited by a scheme approved under Professional Standards Legislation
53
Annual Report 2023 | 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 14 July 2023.
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
Equity security holders
Holders of ordinary shares
Number
3,315
2,347
534
423
28
6,647
The names of the twenty largest security holders of quoted equity securities are listed below:
Ordinary shares
Number
% of total shares issued
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
Molvest Pty Ltd
Grahger Retail Securities Pty Ltd
Grahger Retails Securities Pty Ltd
BNP Paribas Noms Pty Ltd
BNP Paribas Nominees Pty Ltd
Citicorp Nominees Pty Limited
Netwealth Investments Limited
BNP Paribas Noms(NZ) Ltd
HSBC Custody Nominees (Australia) Limited
NCH Pty Ltd
GCS Narooma Pty Ltd
BNP Paribas Nominees Pty Ltd
McNiven & Co Pty Ltd
28421 Pty Ltd
Anacacia Pty Ltd
Substantial holders
Substantial holders in the Company are set out below:
Scali Consolidated Pty Limited
BlackRock Group
Magellan Financial Group Limited
54
13,822,188
11,115,813
11,039,474
8,904,805
3,398,402
2,816,763
1,200,000
1,100,000
900,000
879,179
571,662
549,715
479,446
269,139
268,174
223,642
220,000
217,878
163,500
150,000
150,000
58,439,780
17.06
13.72
13.63
10.99
4.20
3.48
1.48
1.36
1.11
1.09
0.71
0.68
0.59
0.33
0.33
0.28
0.27
0.27
0.20
0.19
0.19
72.16
Ordinary shares
Number
% of total shares issued
11,039,474
5,424,462
4,896,103
21,360,039
13.63
6.69
6.04
26.36
Annual Report 2023 | Nick Scali Limited
Milo 3 Seat + Chaise in pebble Link fabric.
Annual Report 2023 | Nick Scali Limited
55
Corporate Directory
Nick Scali Limited
ABN 82 000 403 896
Directors
John Ingram
(Independent Non-Executive Chair)
Carole Molyneux
(Independent Non-Executive Director)
Stephen Goddard
(Independent Non-Executive Director)
William Koeck
Registered Office
Level 7, Triniti II
39 Delhi Road
North Ryde NSW 2113
Telephone: 02 9748 4000
Share Register
Link Market Services Limited
Level 12
680 George Street
Sydney NSW 2000
(Independent Non-Executive Director)
Telephone: 02 8280 7100
Kathy Parsons
(Independent Non-Executive Director)
Anthony Scali
(Managing Director & Chief Executive Officer)
Company Secretary
Sheila Lines
Auditor
Ernst & Young
200 George Street
Sydney NSW 2000
Solicitors
Ashurst
Level 11, 5 Martin Place
Sydney NSW 2000
Stock Exchange Listing
Nick Scali Limited shares are
listed on the Australian Securities
Exchange (ASX code: NCK)
Website
www.nickscali.com.au
56
Annual Report 2023 | Nick Scali Limited
Store Locations
New South Wales
Australian Capital
Alexandria
Auburn
Bankstown
Belrose
Bennetts Green
Campbelltown
Campbelltown Clearance
Caringbah
Castle Hill
Casula
Erina Clearance
Kotara
Marsden Park
Moore Park
Penrith
Prospect
Prospect Clearance
Rutherford
Tuggerah
Warrawong
West Gosford
Territory
Fyshwick
Fyshwick Clearance
Queensland
Aspley
Bundall
Cairns
Fortitude Valley
Helensvale
Jindalee
Macgregor
Mackay
Maroochydore
Morayfield
North Lakes
Robina
Skygate (Brisbane Airport)
Toowoomba
Townsville
Virginia Clearance
Victoria
Chirnside
Craigieburn
Essendon
Dandenong Clearance
Frankston
Geelong
Maribyrnong
Moorabbin
Nunawading
Nunawading Clearance
Preston
Richmond
Shepparton
South Wharf
Springvale
Taylors Lakes
Tasmania
Hobart
New South Wales
Australian Capital
Albury
Alexandria
Artarmon
Auburn
Belrose
Caringbah
Castle Hill
Crossroads
Newcastle
Prospect
Rutherford
Warrawong
West Gosford
Territory
Fyshwick
Queensland
Aspley
Bundall
Capalaba
Fortitude Valley
Helensvale
Jindalee
Logan
Maroochydore
North Lakes
Toowoomba
Townsville
Victoria
Ballarat
Dandenong
Frankston
Geelong
Highpoint
Knox
Moorabbin
Nunawading
Preston/Northland
Richmond
Shepparton
Springvale
Taylors Lakes
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
South Australia
Gepps Cross
Marion
Mile End
Western Australia
Joondalup
Myaree
Osborne Park
57
Annual Report 2023 | Nick Scali Limited