Nick Scali told to pay freight bill; Australia Post after another big loss revealed
Waiting on furniture from Nick Scali? You’re probably not alone, given the furniture retailer has about 240 shipping containers locked up by one of its shipping contractors amid a payment dispute.
Nick Scali’s lawyers took to the federal court on Monday to try to force delivery of the containers, but got sent away with a flea in their ear by Justice Angus Stewart, who told the retailer to pay its freight bills and only come back if the goods still aren’t delivered.
At stake is $18.6m worth of furniture belonging to “increasingly agitated” customers who’ve been left waiting for delivery of their leather couches. The reason? A breakdown in relations between the retailer and its main shipping company, Lion Global Forwarding – exacerbated, according to the court, by Lion’s tardiness in paying a subcontractor in China. In turn China’s Shenzhen HJT Supply Chain Management has stopped loading up Nick Scali furniture for delivery to Australia.
Two weeks ago Lion asked Nick Scali for $US1.3m to clear its own bills in China. The retailer baulked, concluding – not unreasonably – it had no guarantee that Lion would then pay HJT.
As a result, Lion has now stopped all deliveries to Nick Scali, which prompted Monday’s trip to court. Sadly for Nick Scali customers, Justice Stewart couldn’t fault Lion’s decision.
“If Nick Scali had paid Lion that may have enabled Lion to pay HJT, and Nick Scali may have received its deliveries,” Justice Stewart’s decision says.
None of this appears to be Nick Scali’s fault, to be fair.
But you might wonder why chief executive Anthony Scali didn’t feel the need to mention the dispute at the company’s annual shareholder meeting last week, given the blue was already in full swing. Instead he merely warned of “materially higher unexpected freight rates” that were undermining profit growth.
None of which helps any of the poor customers sitting on the floor because their new couch is stuck in a shipping container somewhere between Australia and China. NE
Sacks of cash
A great round of backslapping seems to be taking place within the leadership team at Australia Post. You’d think they’d just ended the two-year dry spell and finally delivered a long-awaited profit.
Quite the opposite.
The government-owned enterprise has posted another full-year loss before tax of $88.5m, which has somehow resulted in a generous splashing of bonuses and pay bumps for its well-paid executives.
All of which is revealed in the corporation’s annual report tabled in federal parliament on Monday, the result – horrendous as it looks – flaunted on page 94 as an “exceptional outcome” for the business.
The rationale for this is simple. The losses for FY24 were forecast to be much, much higher, well north of last year’s losses of $200m, and so on that basis the actual result – unsightly as it still looks – can being lauded as a remarkable bit of turnaround wizardry.
Australia Post’s leaders spent the year caning taxpayers to achieve that result. They raised the price of stamps by 25 per cent, scaled back services and closed post offices around the country. CEO Paul Graham said earlier this year that even more locations will have to close in the coming months for the business to remain viable.
He even flagged the possibility of a multibillion-dollar government bailout.
You can see why, on that basis, the bonuses laid out in the remuneration tables were so well deserved. Sheesh.
Graham’s take home pay grew by $301,952 (or 13 per cent) for a total of $2.68m, his salary (partly set by a tribunal) increasing to the tune of $216,128 – the balance arrived in the form of a cash bonus.
Executive general managers Susan Davies and Gary Starr earned an extra $181,855 and $179,466, respectively, with Rod Barnes receiving $114,287 and Michael McNamara scoring $82,213. These were bonus-based increases approved by the Australia Post board (which happens, we might add, to include Richard Dammery, chairman of Wisetech, who previously worked with Graham at Woolworths).
Not a bad outcome for a leadership group that, according to the same annual report, didn’t meet the prescribed performance standards and is currently at risk of falling short of its annual financial targets for FY25.
And let’s not even get started on the management class toiling below the C-suites, the hundreds of employees earning salaries of up to $850,000 and receiving bonuses large enough to put a down payment on a house (or buy a display case full of Cartier watches).
Imagine how much better the group’s results might have looked if the organisation didn’t keep eating its own costs to keep clients on the books?
Margin Call revealed an example of these desperate tactics last month, in a case involving RM Williams. Australia Post offered the valued customer and bootmaker a 50 per cent discount on the standard fuel surcharge that clients are expected to pay (to facilitate the couriering of products) as a sweetener to retain the account. YB
In the pink
Spotted! Linda Rogan, wellness entrepreneur, yucking it up with pals at Bondi’s Icebergs fine-dining restaurant on the weekend after bringing former lover Richard White to heel.
The details of their settlement remain wrapped up in an NDA, but Rogan was showing every sign of enjoying the win.
Her message to followers on Instagram: I had to go to war to win this peace. NE
More wrongs than rights at the AHRC?
A case of curious priorities over at the Australian Human Rights Commission where hand-picked appointee Giridharan Sivaraman seems to prefer playing politics over action on anti-Semitism.
Freehills partner given notice over synagogue tweet
Herbert Smith Freehills leaders have voted to remove one of its longstanding partners, Damien Hazard, over a ‘deeply offensive’ tweet targeting Jeremy Leibler.