ASX:NCK

Stock Analysis Report

Executive Summary

Nick Scali Limited, together with its subsidiaries, engages in sourcing and retailing household furniture and related accessories in Australia and New Zealand.

Rewards

Trading at 0.3% below its fair value

Revenue is forecast to grow 5.76% per year

Earnings grew by 2.8% over the past year

Risk Analysis

Earnings are forecast to decline by an average of -0.2% per year for the next 3 years

Unstable dividend track record



Snowflake Analysis

Excellent balance sheet established dividend payer.

Share Price & News

How has Nick Scali's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: NCK has not had significant price volatility in the past 3 months.


Market Performance


7 Day Return

0.6%

NCK

-0.2%

AU Specialty Retail

2.0%

AU Market


1 Year Return

42.4%

NCK

53.3%

AU Specialty Retail

19.8%

AU Market

Return vs Industry: NCK underperformed the Australian Specialty Retail industry which returned 56.7% over the past year.

Return vs Market: NCK exceeded the Australian Market which returned 19.4% over the past year.


Shareholder returns

NCKIndustryMarket
7 Day0.6%-0.2%2.0%
30 Day0%0.7%3.5%
90 Day8.5%3.1%5.8%
1 Year52.7%42.4%60.3%53.3%25.2%19.8%
3 Year31.0%9.5%32.6%15.8%39.6%20.9%
5 Year236.5%156.4%97.2%59.5%61.8%25.3%

Price Volatility Vs. Market

How volatile is Nick Scali's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is Nick Scali undervalued compared to its fair value and its price relative to the market?

1.6%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: NCK (A$7.13) is trading below our estimate of fair value (A$7.15)

Significantly Below Fair Value: NCK is trading below fair value, but not by a significant amount.


Price To Earnings Ratio

PE vs Industry: NCK is good value based on its PE Ratio (13.7x) compared to the Specialty Retail industry average (16.7x).

PE vs Market: NCK is good value based on its PE Ratio (13.7x) compared to the Australian market (18.9x).


Price to Earnings Growth Ratio

PEG Ratio: NCK's earnings are forecast to decline next year, so we can't calculate its PEG ratio.


Price to Book Ratio

PB vs Industry: NCK is overvalued based on its PB Ratio (6.8x) compared to the AU Specialty Retail industry average (2.4x).


Next Steps

Future Growth

How is Nick Scali forecast to perform in the next 1 to 3 years based on estimates from 2 analysts?

-0.2%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: NCK's earnings are forecast to decline over the next 3 years (-0.2% per year).

Earnings vs Market: NCK's earnings are forecast to decline over the next 3 years (-0.2% per year).

High Growth Earnings: NCK's earnings are forecast to decline over the next 3 years.

Revenue vs Market: NCK's revenue (5.8% per year) is forecast to grow faster than the Australian market (3.8% per year).

High Growth Revenue: NCK's revenue (5.8% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: NCK's Return on Equity is forecast to be very high in 3 years time (41.2%).


Next Steps

Past Performance

How has Nick Scali performed over the past 5 years?

22.6%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: NCK has high quality earnings.

Growing Profit Margin: NCK's current net profit margins (15.7%) are lower than last year (16.3%).


Past Earnings Growth Analysis

Earnings Trend: NCK's earnings have grown significantly by 22.6% per year over the past 5 years.

Accelerating Growth: NCK's earnings growth over the past year (2.8%) is below its 5-year average (22.6% per year).

Earnings vs Industry: NCK earnings growth over the past year (2.8%) exceeded the Specialty Retail industry -2%.


Return on Equity

High ROE: NCK's Return on Equity (49.4%) is considered outstanding.


Return on Assets


Return on Capital Employed


Next Steps

Financial Health

How is Nick Scali's financial position?


Financial Position Analysis

Short Term Liabilities: NCK's short term assets (A$77.5M) exceed its short term liabilities (A$61.2M).

Long Term Liabilities: NCK's short term assets (A$77.5M) exceed its long term liabilities (A$26.2M).


Debt to Equity History and Analysis

Debt Level: NCK's debt to equity ratio (39.5%) is considered satisfactory.

Reducing Debt: NCK's debt to equity ratio has increased from 16.9% to 39.5% over the past 5 years.

Debt Coverage: NCK's debt is well covered by operating cash flow (134.8%).

Interest Coverage: NCK's interest payments on its debt are well covered by EBIT (258.9x coverage).


Balance Sheet

Inventory Level: NCK has a high level of physical assets or inventory.

Debt Coverage by Assets: NCK's debt is covered by short term assets (assets are 2.3x debt).


Next Steps

Dividend

What is Nick Scali's current dividend yield, its reliability and sustainability?

6.38%

Current Dividend Yield


Dividend Yield vs Market

company6.4%marketbottom25%2.3%markettop25%5.4%industryaverage3.9%forecastin3Years5.7%

Current dividend yield vs market & industry

Notable Dividend: NCK's dividend (6.31%) is higher than the bottom 25% of dividend payers in the Australian market (2.34%).

High Dividend: NCK's dividend (6.31%) is in the top 25% of dividend payers in the Australian market (5.47%)


Stability and Growth of Payments

Stable Dividend: NCK's dividend payments have been volatile in the past 10 years.

Growing Dividend: NCK's dividend payments have increased over the past 10 years.


Current Payout to Shareholders

Dividend Coverage: At its current payout ratio (86.5%), NCK's payments are covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: NCK's dividends in 3 years are forecast to be covered by earnings (82.4% payout ratio).


Next Steps

Management

What is the CEO of Nick Scali's salary, the management and board of directors tenure and is there insider trading?

15.8yrs

Average board tenure


CEO

Tony Scali 0

0yrs

Tenure

AU$1,199,622

Compensation

Mr. Anthony J. Scali, BCom, also known as Tony, serves as the Managing Director and has been Executive Director of Nick Scali & Co. Pty Ltd. and Nick Scali Limited since July 25, 1983. Mr. Scali served as  ...


CEO Compensation Analysis

Compensation vs Market: Tony's total compensation ($USD827.90K) is about average for companies of similar size in the Australian market ($USD724.04K).

Compensation vs Earnings: Tony's compensation has been consistent with company performance over the past year.


Board Age and Tenure

15.8yrs

Average Tenure

77yo

Average Age

Experienced Board: NCK's board of directors are seasoned and experienced ( 15.8 years average tenure).


Insider Trading

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.


Recent Insider Transactions

SellAU$7,938,32115 Jan 20
First Sentier Investors (Australia) IM Ltd
EntityCompany
Shares1,183,434
Max PriceAU$6.71
BuyAU$2,478,60415 Jan 20
First Sentier Investors (Australia) IM Ltd
EntityCompany
Shares379,404
Max PriceAU$6.53
SellAU$7,203,61808 Jan 20
First Sentier Investors (Australia) IM Ltd
EntityCompany
Shares1,078,953
Max PriceAU$6.72
BuyAU$3,158,94408 Jan 20
First Sentier Investors (Australia) IM Ltd
EntityCompany
Shares472,103
Max PriceAU$6.94
BuyAU$5,625,04428 Nov 19
Perpetual Limited
EntityCompany
Shares909,466
Max PriceAU$6.18
BuyAU$3,911,59709 Sep 19
UBS Asset Management
EntityCompany
Shares586,167
Max PriceAU$6.67
SellAU$694,49409 Sep 19
UBS Asset Management
EntityCompany
Shares102,477
Max PriceAU$6.83
SellAU$5,167,10505 Sep 19
Magellan Asset Management Limited
EntityCompany
Shares738,111
Max PriceAU$7.00
BuyAU$12,890,80505 Sep 19
Magellan Asset Management Limited
EntityCompany
Shares1,946,414
Max PriceAU$6.62
BuyAU$11,092,84505 Sep 19
Perpetual Limited
EntityCompany
Shares1,674,055
Max PriceAU$6.63
SellAU$2,355,42705 Sep 19
Perpetual Limited
EntityCompany
Shares348,014
Max PriceAU$6.77
SellAU$3,679,70604 Sep 19
UBS Asset Management
EntityCompany
Shares567,397
Max PriceAU$6.69
BuyAU$3,674,17804 Sep 19
UBS Asset Management
EntityCompany
Shares567,144
Max PriceAU$6.48
BuyAU$1,130,99506 Aug 19
First Sentier Investors (Australia) IM Ltd
EntityCompany
Shares200,000
Max PriceAU$5.65
BuyAU$4,524,81806 Aug 19
Realindex Investments Pty Limited
EntityCompany
Shares678,888
Max PriceAU$6.67
BuyAU$4,692,09305 Aug 19
First Sentier Investors (Australia) IM Ltd
EntityCompany
Shares778,338
Max PriceAU$6.13
SellAU$5,384,96705 Aug 19
First Sentier Investors (Australia) IM Ltd
EntityCompany
Shares896,133
Max PriceAU$6.01
SellAU$3,144,05602 Aug 19
Ethical Partners Funds Management
EntityCompany
Shares452,740
Max PriceAU$6.94
BuyAU$8,352,81302 Aug 19
Ethical Partners Funds Management
EntityCompany
Shares1,330,100
Max PriceAU$6.28
SellAU$6,279,37019 Jun 19
Perpetual Limited
EntityCompany
Shares877,491
Max PriceAU$7.43
SellAU$7,030,97629 May 19
Magellan Asset Management Limited
EntityCompany
Shares1,033,220
Max PriceAU$6.98
BuyAU$27,955,77614 May 19
Ethical Partners Funds Management
EntityCompany
Shares4,743,203
Max PriceAU$6.21
SellAU$26,272,73514 May 19
Magellan Asset Management Limited
EntityCompany
Shares4,147,390
Max PriceAU$6.33
SellAU$9,906,60214 May 19
Perpetual Limited
EntityCompany
Shares1,612,037
Max PriceAU$6.40
BuyAU$818,14514 May 19
Perpetual Limited
EntityCompany
Shares139,962
Max PriceAU$5.86
SellAU$8,337,40112 Mar 19
Perpetual Limited
EntityCompany
Shares1,435,088
Max PriceAU$5.81
BuyAU$624,03912 Mar 19
Perpetual Limited
EntityCompany
Shares102,638
Max PriceAU$6.08

Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.


Management Team

  • Tony Scali

    MD & Executive Director

    • Compensation: AU$1.20m
  • Christopher Malley

    CFO & Company Secretary

    • Tenure: 0.9yrs
    • Compensation: AU$265.62k

Board Members

  • John Ingram (77yo)

    Independent Non-Executive Chairman

    • Tenure: 15.8yrs
    • Compensation: AU$200.00k
  • Stephen Goddard (61yo)

    Independent Non-Executive Director

    • Tenure: 1.8yrs
    • Compensation: AU$108.00k
  • Tony Scali

    MD & Executive Director

    • Compensation: AU$1.20m
  • Greg Laurie (77yo)

    Independent Non-Executive Director

    • Tenure: 15.8yrs
    • Compensation: AU$120.00k
  • Carole Molyneux

    Independent Non-Executive Director

    • Tenure: 5.6yrs
    • Compensation: AU$112.00k

Company Information

Nick Scali Limited's company bio, employee growth, exchange listings and data sources


Key Information

  • Name: Nick Scali Limited
  • Ticker: NCK
  • Exchange: ASX
  • Founded:
  • Industry: Homefurnishing Retail
  • Sector: Retail
  • Market Cap: AU$571.050m
  • Shares outstanding: 81.00m
  • Website: https://www.nickscali.com.au

Number of Employees


Location

  • Nick Scali Limited
  • Triniti II
  • Level 7
  • North Ryde
  • New South Wales
  • 2113
  • Australia

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
NCKASX (Australian Securities Exchange)YesOrdinary SharesAUAUDMay 2004
NCKCHIA (Chi-X Australia)YesOrdinary SharesAUAUDMay 2004

Biography

Nick Scali Limited, together with its subsidiaries, engages in sourcing and retailing household furniture and related accessories in Australia and New Zealand. The company offers lounges, dining tables and chairs, armchairs, buffets/cabinets, TV units, coffee tables, consoles, bedroom furniture, mattresses and bases, rugs, mirrors, and pendants and lamps. It provides its products through 57 Nick Scali Furniture stores, as well as online. Nick Scali Limited is based in North Ryde, Australia. 


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2020/01/19 10:32
End of Day Share Price2020/01/17 00:00
Earnings2019/06/30
Annual Earnings2019/06/30


Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.