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Nick Scali sees double digit sales growth

AAP logoAAP 10/08/2016 Petrina Berry

The boss of furniture retailer Nick Scali expects lower interest rates and low unemployment will continue to fuel the housing market and drive demand for furniture.

The retailer on Thursday said its profit for the 12 months to June 30 rose 53.1 per cent to $26.15 million, and revenue jumped more than 30 per cent to $203 million, thanks to 11.1 same store sales growth.

Chief executive Anthony Scali says that growth, in an "exceptional" year, was partly due to the full-year benefit of seven stores that opened in the second half of the 2015 financial year.

He said the company expected growth to continue, although profit and sales gains would likely ease somewhat during in FY2017 without the benefit of new stores coming on line.

"The housing cycle has been helping and we have been spending more on marketing," Mr Scali said.

"We expect growth to continue but at a more subdued rate because we won't have the full-year benefit of new stores."

He said he believed the latest Reserve Bank's interest rate cut would bolster residential construction and fuel more demand for furniture.

"In July (the start of 2016/17 year), we had good sales growth again," he said.

"I'm hopeful the lower interest rates and low unemployment levels will continue to help."

He said NSW and Victoria were the two strongest markets, while the economies in Queensland and WA had taken a hit from the mining downturn.

The company expanded into WA in March 2015, and while Mr Scali admitted it was "the worst possible time," he said the group's four stores in the state had performed surprisingly well.

The group now has 42 stores across Australia and plans to open another six this financial year. It expects to open its first New Zealand store in FY2018.

The long-term plan is have about 75 stores across Australia and NZ in coming years.

Nick Scali declared a 14 cents a share final dividend, fully franked, plus a special fully franked dividend of 3.00 cents.

Shares in Nick Scali had soared 12.19 per cent, or 58.5 cents, to $5.385 by 1200 AEST.

NICK SCALI ENJOYS EXCEPTIONAL YEAR:

* Net profit up 53.1pct to $26.15m

* Revenue up 30.4pct to $203m

* Final dividend of 14.0 cents, up from 8.0 cents in FY2015, plus a 3.00 cent special dividend

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