Chain store Nick Scali just posted a record profit but sees storm clouds ahead for furniture retailers.
The housing boom helped the company lift full year net profit after tax by 42.4% to $37.2 million and increase sale revenue by 15% to $232.9 million. Same store sales growth was 10%.
However, the company sounded a warning about a slow down in the housing market which could reduce demand for new furniture.
A short time ago, the shares were down more than 11% to $5.92.
Anthony Scali, the managing director, says overall performance has been underpinned by favourable market conditions.
However, the company believes sales growth will be challenging in 2018.
“The furniture market is directly influenced by consumer confidence, interest rates, unemployment levels and the volume of home renovations and housing sales,” the company says.
“Given the uncertainty of trading conditions moving forward, it is very difficult to provide any profit guidance for FY18.”
The company declared a final dividend of 20 cents a share, a 42.9% increase on last year.
The numbers for the 2017 result: