Furniture retailer Nick Scali warns freight company collapse will threaten first-half profits

Furniture retailer Nick Scali has warned the collapse of one of its freight forwarders has led to a significant number of containers delayed at ports, causing delivery headaches and threatening profits for the furniture store. The company told the market on Wednesday that due to the delays, it now expected to incur unexpected additional storage and detention costs for the containers, which cannot be quantified at this time. Nick Scali said these unexpected costs were adding significant risks to the company’s ability to hit prior net profit guidance of between $30 million to $33 million for the first half.

Cheyanne Enciso Cheyanne Enciso “To resolve the issue the company made an application to the Federal Court of Australia to seek orders for the shipping lines to release the company’s containers through the giving of certain undertakings,” Nick Scali said. “With the Court orders now granted, the company is working to have these containers delivered to its distribution centres to allow delivery of the goods to its customers as soon as practicable.” At the company’s annual general meeting last month, managing director Anthony Scali flagged higher freight rates were expected to impact its gross profit margin.



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